This report by HBSC indicates that more rich non-Swiss citizens are inquiring about becoming Swiss residents because of high taxes in their home country. For instance, the UK will charge people who make more than £150,000 ($244,000) a year 50% income tax (relative to the UK, the marginal US tax rate isn't too bad).
Thus, the question for policy makers is - "How much can the government raise taxes before it starts losing its top tax payers?". For reference, in 2007, the top 1% of tax payers (with more than $410,096 Adjusted Gross Income) accounted for 40.42% of total US tax revenue.
2 comments:
This is really interesting.
I think it is a good thing that the U.S. government is seeking and prosecuting those who have placed money paid to them under-the-table in Swiss banks accounts. But I do hope that Switzerland doesn't give up too many of their banks' advantages, because their bank accounts are a good resource for non-residents to stow away money in.
Taxes have become such a hot topic lately that I've even heard of certain people trying NOT to make more money in the U.S. because they are right on the border of being placed in a higher tax bracket! For example a personal trainer I know is currently not taking on more clients because he would then make more than $350,000 household income (or something around there) and does not want to pay more taxes.
A 50% income tax for citizens in the highest income bracket would be an example of an overzealous progressive tax. The government of the United Kingdom will hopefully not enact this tax as it would be very detrimental to growth. Comparing the progressive tax system of other developed nations with that of the United States makes our debate over much more modest increase in progressive taxes seem like a small and easy decision.
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