High Taxes

What these governments don't understand is that taxes reduce innovation. They seem to think that people will tolerate any tax rate and business will continue as usual. It doesn't.

A good example is France. France has one of the highest tax rates in the world. If people are willing to leave their homeland to keep more of the money they earn, they will do so. About 3.5 years ago, an article published in the Washington Post titled, "Old Money, New Money Flee France and Its Wealth Tax" is a good example of the flight from taxes. Or, more recently, the flight from the new taxes imposed in the UK, "Hundreds of bosses flee UK over 50% tax".

Relatively, USA looks pretty good on the list (except for New York and Illinois). But our relative position is not as important. People always get caught up with how we compare to something else. Relatively, I am rich compared to a homeless guy living on the street. At the same time, relatively, I am poor compared to Steve Jobs. Relatively is not what matters. Absolute terms does because that is what affects you.

A top federal income tax rate of 35% + social security taxes (since I will never see a return) + medicare/medicaid taxes + state income taxes + sales taxes + property taxes + car registration taxes + and on and on. At the end of the day, easily 60% of the money you make goes to the government.

You may not work for the government, but in fact, you do.