Raising the tax rate is always argued from the point of view of increasing revenues for governments. What is very seldom heard is how high tax rates effect the behavior of people. As my regular readers know I have written many posts on some of the effects taxes has on the behavior of people. And as this story in the Wall Street Journal reveals it not only effects the behavior of people but it also has a negative effect on the revenues of the taxing governments.
Another case for self-interest over the altruistic viewpoint of a Socialized government.
‘As the post-Olympics glow fades, U.K. policy makers are trying to figure out how to keep the flame of British sports burning. They could start by changing Her Majesty’s tax laws. After Jamaican sprinter Usain Bolt won his third gold in London last week, reporters asked him why he doesn’t compete in the U.K. more often. “As soon as the law changes I’ll be here all the time,” he said.
Punitive tax policy had kept the world’s fastest man from competing in Blighty for the past three years. Explaining Mr. Bolt’s decision to skip a 2010 race in London, his agent told reporters: “He will earn a lot less by competing in Britain if he maintains his current endorsement level.” Mr. Bolt competed in Paris that August instead.
The lesson is that taxes influence behavior, and punitive taxation hurts everyone, not least the punitive nation.’