Ayn Rand wrote 1088 pages of Atlas Shrugged
I’m a little embarrassed by this idea but now I am wondering if Ayn Rand might not have been mostly right in her prophecy, just wrong about the structure of the fleeing. In Atlas Shrugged individuals fled physically. What if we looked at the extent to which corporations have fled virtually?
If I recall correctly, not everyone sought to flee in Atlas Shrugged. The less productive chose to stay around as cronies of the government or collectors of government hand-outs. The least productive American enterprises certainly seem to be sticking around: education, health care delivery, health insurance, etc. I haven’t heard about an American hospital system engaging in a corporate inversion with an Irish hospital or funneling all of the profits through an offshore trust in the Netherlands. What about our corporate heroes, though, such as Apple and the pharmas? There is still a lot of accumulated wealth in the U.S. so they operate here but, perhaps with an eye toward the Tax Foundation’s tax competitiveness index (U.S. rank: 32/34), are virtually fleeing to other jurisdictions as their tax and/or profit home.
- “Curbs Don’t Stop Tax-Driven Mergers” (WSJ on inversions)
- “U.S. Beer Maker Says Tax Code Encourages Foreign Takeovers”
- “The Hypocrisy of ‘Helping’ the Poor” (nytimes article by Paul Theroux suggesting that managers of U.S. companies act against shareholders’ economic interests by locating factories in the U.S. South)
I don’t think Saverin is a good example. He had American citizenship, but I don’t believe he was really American.
Also, can’t you look at a place like France and say it is further along the continuum and who has fled there? Do you have to be really, really, really drunk to flee? (Gerard Depardieu)
My feeling is, corporations are fleeing taxation, not bureaucracy (also because it would mean fleeing from one of their most beloved internal properties). Let’s do this: you create the free republic of Philland. The country has a byzantine and arcane bureaucracy but levies no corporate taxes. Will corporations bite the bullet and flee to Philland?
Colin: I think that you missed the point of the original posting. It was that corporations would flee, not individuals. So the relevant question for France would be which companies had fled, e.g., by being acquired by a company in country with a lower corporate tax rate. We would want to look at the most successful companies in France and those least dependent on government handouts and see if any of them were acquired by, e.g., a German or British company (though France has a lower corporate tax rate (about 10 points if you consider federal + state) to begin with than does the U.S., so the benefits of fleeing are not as large).
[But of course there are plenty of French citizens who have become tax exiles. A quick Google search turns up http://www.bbc.com/news/world-europe-20951764 and http://www.telegraph.co.uk/news/worldnews/europe/france/10407894/Eurostar-ad-calls-on-French-tax-exiles-to-move-to-Britain.html and http://www.reuters.com/article/2012/12/21/france-tax-exiles-idUSL5E8NL4L620121221 ]
Federico: I don’t think you can separate taxation from bureaucracy. A country such as Singapore where government is only 14 percent of GDP can’t have as much bureaucracy as a country like the U.S., where government is between 40 and 50 percent of GDP (depending on how you count non-Medicare/Medicaid health care).
Somewhat relevant – govt workers earn 78% more (wages + benefits) than private sector (average $120k vs $67k):
http://freebeacon.com/issues/study-government-workers-make-78-percent-more-than-private-sector/
The situation doesn’t resemble the fantasy world created by Rand. The computer and pharmaceutical corporations are nothing like John Galt. They’ve been beneficiaries of corporate welfare for decades. Besides that, one of the tax haven jurisdictions is the Netherlands, which has a bigger welfare state than the USA.
Hmm, I wonder what would be Ayn Rand’s take on child support. Just wanted to drop a note, have you seen this? http://www.womansdivorce.com/child-support-modification.html
One of the women there is contesting the paternity of an ex-huband’s child, and asking if she has the right to demand a parternity test, because it might lower her child support, LOL:
Can he reduce support if his wife bears a child that isn’t his?
Melissa’s Question: My ex-husband married a woman when she was pregnant. He signed the birth certificate when the child was born. He has not legally adopted this child yet. He’s asking the court to lower his child support payments for our two children because this baby was born. How can I request a paternity test in court for this other kid? Do I have that right?
Brette’s Answer: In most states the law is that when a man is married to a woman and she gives birth, he is the legal father, unless it is proven otherwise. I’m not sure you would have standing to challenge that presumption in this instance. Even if it is not his biological child, it is his stepchild and is a dependent in his household. You should talk to an attorney who can review your state’s laws.
I find it quite amusing that this law’s assumption of paternity during marriage is turning out to be a headache for another woman.
Could that be another strategy for the loser – just claim several other children until the “winner” get’s an adjusted CS that is more in line with actual costs of raising a child? An expensive way to go, but interesting thought experiment…
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Rand was a nutcase. I just found out on from reading another (red state-like) blog that the wonderful invention by John Galt that government bureaucrats suppressed was a perpetual motion machine. For this alone, no one should have taken Rand seriously, ever.
But yes, there is a pattern of people succeeding in emigrating from the USSR to the USA and then deciding that the USA bureaucracy and USA culture is just as bad. You don’t need to use Rand as an example, it is pretty common. It could be an extreme case of the “grass is greener” syndrome or they could well have a point.
Phil, you seem to confuse country size with GDP percentage spent by the government and bureaucracy. If the US of A were the size of Manhattan they would not have the logistic expenses they have now, and they would have a much simpler bureaucracy. Come to think of it, it seems that all the tax heaven countries are (1) small and/or (2) have a small population (such as Ireland).
Federico: For how much government costs as a percentage of GDP you can refer to the Tax Foundation’s web site. For example, http://www.heritage.org/index/country/singapore shows a spend of 14.4 percent of GDP while http://www.heritage.org/index/country/greece is at 58.5 percent of GDP. The numbers are not adjusted for “country size” (geographic or population) but they are inherently adjusted for the size of the economy (GDP).
The hypothesis that a compact geography reduces the cost of government is not supported by U.S. data. New York has the highest tax burden for state/local government, as a percentage of GDP, of any U.S. state (see http://taxfoundation.org/state-tax-climate/new-york ). http://taxfoundation.org/article/annual-state-local-tax-burden-ranking-fy-2011 shows that a lot of sparsely populated states, e.g., New Hampshire, Texas, South Dakota, et al., are able to operate state/local government with a much lower percentage of GDP in taxes.
Ed: it was not a perpetual motion machine, more like something by Tesla, that would use already-present electro-magnetic radiation to generate power.
Phil, as I said above ‘Come to think of it, it seems that all the tax heaven countries are (1) small and/or (2) have a small population (such as Ireland).’
I trust the good people of the US of A do vote from time to time, and are thus 100% liable for their taxation choices, given the situation they are in.
@philg: I haven’t heard about an American hospital system engaging in a corporate inversion with an Irish hospital or funneling all of the profits through an offshore trust in the Netherlands.
Why would they – they’re tax-exempt “non-profits.”
Ed – maybe you should read her book if its content is the basis for calling her a nut. OTOH, I did think she seemed way out of touch in interviews of her I watched on Youtube.
Smartest Woman – It’s not just the hospitals – the health insurance company with a virtual monopoly in my state, Blue Cross/Blue Shield, is also ‘non-profit’. They make so much ‘non-profit’ that they can afford to pay the local Symphony Orchestra to play music in the cafeteria.
Atlas Shrugged is Young Adult Science Fiction. People who pretend it’s a serious meditation on macroeconomics never bring up the aforementioned perpetual motion machine, sound wave death beam, or cloaking device that hides the tycoons’ Neverland Ranch where CEOs perform manual labor in exchange for gold coins.
The characters are as two-dimensional as the heroes and villains of Soviet propaganda, right down to their ridiculous names, and the moral lessons are positively medieval. The train tunnel scene, for example, describes an entire train full of men, women, and children as deserving to die for their individual thoughtcrimes.
For an atheist anti-communist, Rand was every bit as dogmatic and anti-human as the institutions she opposed. It’s also a tedious book, and junk economics.