Proof from Track & Field that high taxes decrease economic activity

Blowing.Rock Master wrote:

When the rich vote with their feet, it doesn't hurt the rich. It hurts everybody else.

When the rich vote, with or without their feet, it doesn't hurt the rich...it hurts every everybody else....From now on, the rich should NOT be allowed to vote...Your example proves nothing, by the way, in terms of how high taxes should be.

US tax laws make holding international events in the US very difficult as well.

Except of course in general the rich don't vote with their feet. If they did there would be no rich people in CA. They would all be living in Texas (or another of the no tax states). And I sure don't hear about a lot of rich americans giving up citizenship and moving to other low tax countries.

Blowing.Rock Master wrote:

Usain Bolt refuses to run in the UK because of it's tax laws:

http://www.thesun.co.uk/sol/homepage/sport/olympics/3573077/Usain-Bolt-will-not-compete-in-Britain-again-this-summer-because-of-the-huge-tax-bill-he-would-be-hit-with.html

Because of Britain's draconian tax laws, Bolt would actually lose money if he ran there. The UK missed out on the Champions League Final in 2010 for the same reason. They may now lose the ATP World Tour Final. It's estimated that losing the ATP Final will cost 100 million pounds in economic activity.

When the rich vote with their feet, it doesn't hurt the rich. It hurts everybody else.

this is why the rolling stones left england 40 years ago.

a female POV wrote:

this is why the rolling stones left england 40 years ago.

It is also why Armstrong tried to colonize the moon. Only he did the Stones one better - he got those high taxes to subsidize his exploration!

Another fine example wrote:

a female POV wrote:

this is why the rolling stones left england 40 years ago.

It is also why Armstrong tried to colonize the moon. Only he did the Stones one better - he got those high taxes to subsidize his exploration!

I agree that taxing a portion of his worldwide endorsement earnings becomes absurd.

But lets have some perspective. Its a guy running really fast and nothing more. Its very appropriate to tax Usain Bolt at a high rate on the $500,000 and above. If you don't then people like Bolt, and people much richer than him, are just causing inflation. They don't provide that much to the economy. If they don't like high taxes, then fine, good riddance. Its becoming nothing but overt extortion by trying to argue that if Bolt doesn't run a race then lower class families will not have a job and they will be forced out on the streets.

Here is an actual study proving you wrong - http://minnesota.publicradio.org/features/2011/02/documents/millionaire-migration.pdf

Its just common sense. There are a lot of jobs that aren't mobile (its hard to move your 20 McD franchises, chain of liquor stores, or even your job as an investment banker, and your medical practice might not have the customers in a low cost area). Similarly very few citizens are going to move over a couple of percentage points that modern politicians talk about. No one is pushing for the old 90% tax brackets.

Neb wrote:

Here is an actual study proving you wrong -

http://minnesota.publicradio.org/features/2011/02/documents/millionaire-migration.pdf

Read the article guys... 50% of his appearance fee PLUS a percentage of his worldwide sponsorship income. In the past, they have waved a portion of this for football players but not others. A double standard appears to exist.

Tax laws are only relative to what other countries charge. England's entertainment industry looks to be non-competitive due to their government's tax laws.

This is no 'proof' about higher tax rates causing a problem. I think no one thinks that tax rates over 100% make any sense, and in this case, the tax rate is over 100% (because they would tax other income as well).

Well of course this shows that high taxation depresses economic activity IF THE TAX RATE IS OVER 100%. Bolt is likely to actually LOSE money by competing in the UK because they tax his worldwide endorsements.

I don't think anyone would dispute that if you made tax rates of say 150% that economic activity would decline. Heck, I don't think many people would disagree that a tax rate of 95% would cause economic activity to decline because in this case the marginal benefit of making extra money is only 1/20 of what it would be with no taxes.

But if tax rates are say 50%, then people are keeping HALF of what they would if there were no taxes. I don't think many rich people would say "sure, I'll work hard at my job if I get paid $10M, but if I only get paid $5M...well...I think I'd rather just watch TV". Add this to the fact that a tax rate of zero is completely infeasible, and the difference is even smaller.

So would there be cases in which a highest tax rate of 50% would decrease economic activity over a tax rate of 30%? Probably. But only in very few cases, and not nearly enough to counteract the added revenue from the tax. The few elite rich do not drive the economy, and they can be expected to give back to society some of the incredible wealth that society has given to them.

(For the record, I am against the UK tax on endorsements because it comes to a very high tax rate, and because stars have other cheaper options that they take instead. This is why we need to control companies going offshore to trying to evade taxation.)

The UK tax law is pretty stupid, but I'm wondering why it doesn't affect other sports. Tennis players and golf players can make some serious bank from endorsements and people still play The Open and Wimbledon.

that example proves nothing. why spend all your time protecting the rich? they don't need any help. when the rich are "hurt," that usually means one fewer six thousand dollar shower curtain or, more likely, a little less money in the swiss bank account. I'm more concerned about the other 99 percent. And when we had high income taxes on the wealthy, we had general prosperity. there was a strong connection.

Neb wrote:

Here is an actual study proving you wrong -

http://minnesota.publicradio.org/features/2011/02/documents/millionaire-migration.pdf

Really? You're using a study based on a tax rate of 8.97% and calling it high?

26mi235 wrote:

I think no one thinks that tax rates over 100% make any sense, and in this case, the tax rate is over 100% (because they would tax other income as well).

Apparently the British government disagrees with you.

You can get exemptions as to the application of the tax in regards to major international events such as the Olympics and Wimbledon. They feel that Bolt etc. did not do this and that he makes money from endorsements in Britain and that money is currently untaxed but 'should be'; hence the incremental tax rate is not over 100% but just there ability to collect the tax relies on something that they can impound. Anyway, that is my take from a discussion on Trand and Field News last year.

jjjjjjjjjj wrote:

why spend all your time protecting the rich?

I'm not protecting anyone. I'm merely pointing out what happens when you try to penalize the most productive people in society.

Saying that Bolt is just a sprinter and doesn't do anything useful for society is very short sighted. He is a big draw that can mean the difference between a meet making money or being in the red. There's also the outside businesses who depend on the meet for their welfare.

The article states that the loss of the tennis ATP World Tour Championship would cost London 100 million pounds in economic activity. Do you hate the rich so much that you're willing to sacrifice the welfare of those who make a living from them?

Ask yourself this, how many poor people have ever offered you a job?

Blowing.Rock Master wrote:

Really? You're using a study based on a tax rate of 8.97% and calling it high?

Not to mention that it's from the future... June 2011... wtf