Saturday, March 7, 2009

Going Galt?

In the book Atlas Shrugged, executives, and other leaders and innovators are becoming harder to find. They are objecting to the government's move towards socialism and statism, and to protest are no longer helping to pay for the government.

In the book, as these people leave employment and the government's revenue drops, the society begins to collapse.

Something like that is not too far off.

New York City has almost 9 million citizens, and according to Mayor Mike Bloomberg, 40,000 of those residents pay 50% of the total taxes the city takes in. This isn't only income taxes, but this is also sales taxes, property taxes, and corporate taxes. The thing people forget when they hear this "40,000 people pay 50% of taxes" is that chances are, the CEO's not only pay a ton in income taxes, but they also likely live in the city in a purchased condo/penthouse that they have to pay property taxes on. They also probably own the building that their business is in, and have to pay property taxes on that. Then they have to pay any form of corporate taxes and such to the city.

So yes, 40,000 people CAN and DO pay 50% of NYC taxes.

And if you don't think that those people might be looking to move to, say, Florida, just look at California. Start Thinking Right has a great piece on the subject and quotes the California Business Roundtable's findings;
1. The cost of doing business in California is 30 percent higher than the western-state average.

2. Almost 40 percent of the California decision-makers participating in the Roundtable survey plan to “outsource” jobs from California to other western states, preferably Texas.

3. Half of the companies have “explicit policies to halt employment growth in California while less than five percent of companies have retention policies in place to keep jobs in California.”

4. Last, California’s “regulatory environment is the most costly, complex and uncertain in the nation.” Regulatory costs are 105 percent higher in California than in other western states.

Outsourcing from one country to another is as legitimate as outsourcing from one state to another. It’s a principle from Econ 101. And, it works: Just monitor California.

Or, people could just use their wealth and stop working. I know if I were that wealthy, I could find something to occupy my time.

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