Tuesday, October 4, 2011

Taxes predict everything

According to biologists, billions of years ago the first sea creature wiggled onto the beach. This was a pivotal moment in life's long march from amorphous sea snot into the highest form of mammalian beings—hedge-fund managers. Many people see that as an improvement, but I'm not judgmental. What we don't know is why the first sea creatures were so anxious to leave their ocean habitats. My guess is that it had something to do with taxes.

Reliable people on television have informed me that taxes are the root cause of all behavior. And that means we can predict the future by looking at tax policy. ...

Somewhere in Washington our leaders are furiously planning an economic death spiral. It will start innocently with a modest tax increase on the rich, the same way you might pluck a chicken to give it fair warning before you barbecue it. The final phase will involve a tax rate on the top 1% of earners that is so high it can't be described without the Viking word for pillage. I base my prediction on the fact that the country is out of money, poor people don't have any, rich people do, and the middle class has almost figured out how voting works.

In the old days, every member of the middle class thought he or she had a chance of becoming rich. In that sort of optimistic environment, you don't want to urinate in the pool that you hope to someday swim in. But lately there's more fatalism in the air, thanks to our crushing debt and the hobo militias that I assume are forming all over the country. The middle class will soon trade their unrealistic dreams of wealth for the opportunity to transfer money from total strangers to themselves—a process often referred to as fairness. That's when the rich will get serious about an escape plan, just like the brave little sea creatures billions of years ago.  ...

We've already entered the era of megaships, including plans for island-size vessels with permanent homes and businesses. We'll soon see rapid advances in high-speed Internet for seafaring vessels, floating fisheries, hydroponic gardens, energy generated from waves, and desalination. The only other element needed to trigger mass migration of the wealthy to the oceans is a financial motive. If a billionaire can escape taxation by leaving his dirt-based country behind, he'll save more than enough money to pay for his floating fortress of awesomeness.
--Scott Adams, WSJ, on the ultimate tax haven