by Jeff Haden –
While the U.S. punishes millionaires, Russia and China reward them. In the upside-down era of Barack Obama, the capitalists act like communists and the communists act like capitalists.
Our multimillionaire president frowns on “millionaires and billionaires” and soaks them with higher taxes. But Russia loves them and even offers refugees of high-tax countries asylum.
Last week, the Kremlin, once headquarters of the Evil Empire, granted millionaire French actor Gerard Depardieu Russian citizenship so he can avail himself of Russia’s 13% flat tax and avoid his home country’s proposed new 75% supertax on millionaires.
Depardieu has been looking for a new home after telling France’s newly elected socialist prime minister that he would surrender his passport and French social security card in protest of the tax.
Moscow hopes its lower tax rate will attract a “massive migration of rich Europeans to Russia.” Russia already ranks seventh in millionaires worth more than $30 million. And Deloitte expects the number of Russian millionaires to triple to 1.2 million by 2020. (America, by comparison, has 5.2 million millionaires.)
Take note, Mr. President: Russia’s flat-tax miracle has helped bring its budget back into balance. Its revenues from income taxes have more than doubled since the single, low tax rate was instated.
Communist China, which now runs a socialist market economy, also welcomes millionaires. And it’s been creating record numbers of them since reducing its tax burden. There are now 1.1 million millionaires in China — a national record — and 63,500 multimillionaires and billionaires.
Since abolishing its agriculture tax and slashing its tax on small businesses by 50%, China has enjoyed the world’s biggest gains in the number of rich (though granted, coming off a low base). The vast majority of millionaires in China are business owners, who are taking advantage of the government’s recent market reforms and pro-business tax incentives.
As part of its post-crisis economic stimulus package, Beijing is reforming its VAT tax, which would cut corporate taxes as well. And just two months ago, it launched a new round of tax-cutting measures that will help more than 900,000 companies throughout China.
Meanwhile, back in formerly supercapitalistic America, our leaders have agreed to jack up taxes on small businesses. Obama’s new fiscal-cliff tax hike on individual filers earning $400,000 or more in income will hit more than 750,000 small-business owners. They account for more than 56% of all income from such firms and employ tens of millions of workers, both of which will be hurt by the higher rate.
Yet Obama says “there is still more to do” to make sure “the wealthiest Americans pay their fair share.” He vows to make “our tax code more progressive than it’s been in decades.”
Funny how the Russians and Chinese figured out that class-warfare ideology doesn’t work and is in fact, a recipe for failure. Funny how communists know that lower taxes grow the economy and keep you competitive.
As our president mau-maus the rich to “pay their fair share” to help fund his massive social programs, America, like Europe, risks losing a fair share of its wealth and power to communist superpowers that have rethought and reformed their command-and-control economies.
Obama thinks he’s taking the nation “Forward!” But he’s really taking it back to the failed past.
HT: IBD Editorials