Smith: “I have no issue with paying taxes, whatever I need to do for my country to grow. I am a black man who didn’t go to college, I get to travel around the world, selling my movies. I believe very firmly that America is the only place on Earth where that could exist, so I will pay everything I need to pay.
Clearly, the European Model is more attractive to the Hollywood crowd in theory than in fact.
What the exchange demonstrates is that tax policies have a profound effect, even on those who the Occupy Wall Street crowd says wouldn’t even feel it.
It also provides solid evidence of economist Arthur Laffer’s contention that capital is mobile — and moves away from high-tax areas.
Another news story last week further proved his point.
“Facebook Inc. co-founder Eduardo Saverin will save at least $67 million in federal income taxes by dropping U.S. citizenship, according to a Bloomberg analysis of the company’s stock price,” the Bloomberg news agency reported.
“Those savings will keep growing if Facebook’s shares increase. Saverin renounced his citizenship around September and he lives in Singapore, according to his spokesman, Tom Goodman. Saverin, 30, was part of a small group of Harvard University students who started the social networking site.”
That’s right. Congress and Obama propose punitive taxes and millionaires, and guess what? Millionaires move.
California Gov. Jerry Brown had better pay attention.
“Tax the rich,” CNN reports. “That’s how California Governor Jerry Brown wants to solve the state’s growing budget crisis that now nears $16 billion. The governor laid out his revised spending plan Monday. It would slash $8.3 billion from almost every part of the state’s government. But it would increase funding for K-12 education if voters approve his proposal to hike income taxes on the rich and sales taxes on everyone.”
Already, California is seeing companies and its wealthier citizens leave. It shouldn’t be surprised.
Last year, Oregon hiked the state income tax on the richest 2 percent of its residents, in a typical “soak the rich” scheme to plug a budget hole, but it soon found that its revenue estimates were off by more than a third. Where did that money go? Away. Some of it went out of state, with its owners, some of it went offshore.
Without real tax reform, loopholes will still exist that will allow millionaires to dodge much of the taxation and to keep much of the money Brown hopes to squeeze from them.
Will Smith, Eduardo Saverin and those Oregon and California millionaires aren’t unpatriotic. They just disagree with the Occupy crowd’s idea of “fairness.”