Monday, January 7, 2013

Tax Policy Enters the Twilight Zone

Reprinted with permission from one of my favorite blogs, Beeline...

 At times I think we are living in The Twilight Zone.

For those a little younger than I am, The Twilight Zone was a television series that originally aired from 1959-1964 that combined science fiction, suspense, horror or fantasy which often concluded with a macabre or unexpected twist.

The show started with a voice-over like this which was narrated by the show's creator, Rod Serling.

"This highway leads to the shadowy tip of reality: you're on a through route to the land of the different, the bizarre, the unexplainable...Go as far as you like on this road. Its limits are only those of mind itself. Ladies and Gentlemen, you're entering the wondrous dimension of imagination. Next stop....The Twilight Zone."

If you don't think we have crossed over the line to The Twilight Zone consider this AP story about Gerard Depardieu, the French actor, who recently renounced his birth citizenship because of his anger over the proposal by French President Francois Hollande to raise the income tax on earned income to 75% from the current rate of 41%. In his letter renouncing his citizenship Depardieu stated that he was leaving France because of his belief that success and talent are being punished by the current French government.

Gerard Depardieu

Where is Depardieu going to take up citizenship? Switzerland? Belgium? Austria? UK? USA?

No. This is where we enter The Twilight Zone.

Depardieu is on his way to becoming a Russian citizen as President Vladimir Putin has approved Depardieu's application for citizenship in expedited fashion.

Why would Depardieu be interested in becoming a Russian citizen?

Russia has a flat 13% tax rate. That's right, 13%! France is at 41% and wants to go to 75%. The USA has just increased the income tax rate on rich people like Depardieu to over 40% (including the Obamacare taxes) and communist Russia is at a flat 13%!

This highway has indeed led us to the shadowy tip of reality. We have found we are also on a route to the land of the different, the bizarre, and the unexplainable when a communist country has a flat tax of 13% and what have always been considered free market, capitalistic countries are close to confiscating incomes and property rather than taxing it.

I have to think that if Serling had submitted a Twilight Zone script to CBS in 1962 with a story line that Russia had a flat tax and was luring people of individual talent and achievement away from Western countries it would have been rejected as too far fetched.  Not only has Atlas Shrugged but Ayn Rand could return to her homeland and feel good about it.

Please change the channel! All of this is getting a little too scary to watch. Let's watch Leave It To Beaver instead.