Wednesday, December 5, 2007

Two-Way Wall

"Born and trained at Denmark's expense, but working - and paying lower taxes - elsewhere in Europe, Sorensen is the stuff of nightmares for Danish companies and politicians searching for solutions to an increasingly desperate labor shortage."
"Young Danes, often schooled abroad and inevitably fluent in English, are primed to quit Denmark for greener pastures. One reason is the income tax rate, which can reach 63 percent."

This trend is just getting started. One of the hallmarks of the 21st Century will be taxes redistributing productive populations. 200,000 skilled Brits emigrate every year and are replaced with 500,000 largely unskilled immigrants.

Dubai is able to attract Western human capital because it’s oil wealth eliminates the need for taxes (bad long-term investment though, Allah doesn’t like Infidels or shiny things). Watch Panama, Costa Rica, and Belize thrive as Americans and bad British canoers flock to the low-tax, stable Central American countries.

Which begs the question, what happens to the old, liberal democracies when a larger and larger percentage of the tax base gets chased out by rising tax rates, being replaced with immigrants expecting to be taken care of by social services?

I really don’t know. Maybe a two-way wall.

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