Re: There are a number of problems...
I find taxes to be a necessary evil, and the implementation of such is more about what the end-goal of the society rather than towards some kind of ideal state for economic growth. It's hard to argue with a straight face that taxes only hit the ones who are taxed. If it's a level-ish playing field, a company being taxed at 15% of profits will look around, see that their competition is getting hit with the same tax, and just hike prices, reduce wages, pare back benefits, etc. to other wise pass that tax on. However, a company is a bad example for two reason: One, it's not a level playing field, as even at the state level here in the USA, one company might be taxed a lot higher or lower purely based on where they incorporated; Two, there are very few sectors of the economy that don't include competition on some level with internationally-based entities.
This is where I tend to take issue with the those like Worstall, as I find there is too much conflation of business behavior with individual behavior, even when the latter is looked at in aggregation. The two are very different as many changes in the market struggle to overcome even the collective neuroses of people. Even stepping away from the Wall Street/Main Street dichotomy or the 99% vs 1%, humans are rather unreasonable. Game theory and behavioral economics shows that time and again (and something Worstall alludes to in his article) people don't do what the logical thing would be, and cultural or social mores often inform decision-making, even if it's deleterious to the individual. Aggregate that to a national level and that behavior still persists, which is why trying to assume that people are the same at the market is folly at best. A company is serving a set of masters with a very defined end-goal: Make money. An individual's end-goal is much muddier, and they are the only decision-maker, not a committee or group of people who have to reach consensus.
So with all that, the behavior of people when taxed is not so cut and dried as what companies do. Companies offshore, do inversions (Medtronic buying Covidan and reincorporating in Ireland to lower then tax bill), hold money in international subsidiaries, etc. People... you'd think that if the super-rich really felt that tax policy in the USA was so terrible, they would have the financial means to go international, become a citizen of some tax-friendly nation, then "live" there while still maintaining assets here in the USA. Yet few do. Very few, despite the loud headline from the financial media, renounce their citizenship. And staying in the USA, the numbers in low-tax states compared to high-tax states tell the same story. The taxes on the top 10% in CA, NY, and other high-tax states are absurd. Yet they continue to live there.
The USA was, in the 50s, up around 90% on the highest tax bracket, of which there were many. It also correlated with some of the highest growth seen in the country's history. When it was finally flattened and the top marginal rate reduced in the 80s, the impact to the bottom line was negligible and the economy didn't react much at all until the internet took off like a rocket in the mid 90s. The tax cuts in the 2000s in response to a recession did nothing, and the recent incremental increase (really just a roll-back of the last round of cuts) is being accompanied by the best growth seen in nearly 15 years. Do I attribute the growth to higher taxes? No, but it also seems to demonstrate that tax rates and economic growth aren't as closely linked as many would like to argue. They are probably indirectly linked at best, and easily overwhelmed by external factors like technological innovation.
Biting the hand that feeds IT
