The Corner

Re: The Eduardo Law

David, I could not disagree with you more. Companies and individuals alike should be free to emigrate when their country adopts punitive policies. For decades liberals have inanely insisted that a capital-gains tax cut is just a tax cut for the rich, painting conservatives as lapdogs of the wealthy. Never mind our argument that the world’s highest corporate tax rates, combined with taxes on capital and dividend income, punish capital formation and are terrible for everyone. Never mind our argument that high business taxes chase companies and individuals to other shores — and increasingly to socialist countries in Europe with tax regimes that are more favorable.

It is the foolish and counter-productive tax policies of the left that are chasing Eduardo Saverin to another country, just as they are chasing companies away in increasing numbers. It is even more foolish to punish those people for leaving — what we should do is stop punishing them with high taxes so that they stay. We need to compete against the likes of Singapore. Singapore doesn’t make enemies of its most dynamic entrepreneurs and instead adopts pro-growth policies rationally aimed at improving everyone’s living standards. Naturally, when other countries adopt rational tax regimes, those countries with irrational ones (likes us) are put at a terrible disadvantage, but it’s our own fault. In particular it’s the fault of those who now propose the “Eduardo Law.”

#more#As for Saverin being “ungrateful” in renouncing his citizenship, he might say the same of the U.S. government. After all, isn’t the U.S. being ungrateful to him by punishing his entrepreneurship? 

Obama’s job-killing regulations and the impending sunset of the Bush tax cuts are going to chase many more people and companies away from America. It’s silly to say that those people and companies are being ungrateful, when they’re only doing what rational economics would have predicted. America has always been a great place to live, but there’s nothing automatic about that. The fact that people have given their lives to defend our shores in the past doesn’t make up for the failings of our own generation. We’re having to argue against ruinous policies and philosophies that were already discredited decades ago, after ten years in which our own side systematically betrayed the principles of limited government and individual responsibility.

The “Eduardo Law”  is a terrible idea, and conservatives should fight it and everything like it tooth-and-nail. This is no time for cheap indignation targeted at individuals that are only doing what U.S. law impels them to do.

Under the circumstances we should be grateful that Facebook’s IPO is happening in the U.S. at all. Sarbanes-Oxley has chased most new IPOs by American companies to London and Hong Kong — yet another masterpiece of self-defeating policy. 

Mario Loyola is a senior fellow at the Competitive Enterprise Institute, the director of the Environmental Finance and Risk Management Program of Florida International University, and a visiting fellow at the National Security Institute of George Mason University. The opinions expressed in this column are his alone.


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