The beginning of the end: The exodus of job suppliers

For its entire history, America has been an irresistible offer of economic prosperity. A sizable portion of Americans today are here because their ancestors were allured by the chance to make a better life for themselves, and at the core of that is economic well-being.

Understandably, millions and millions of immigrants have poured into America since its founding, searching for just that. America made the costly investment of freedom in conducting business. And it was costly—America could have extracted untold volumes of tax revenue and other methods of control over businesses at many key opportunities, but the key principle that defines American business has held true: The government has mostly resisted taking advantage of businesses for the majority of its history. For that, the early republic struggled mightily for decades before it found its economic footing. But once it became firmly founded, America has never looked back. Businesses rewarded the government and the people with all the tax money they will ever need by compensating for the comparatively low tax percentages with astronomically higher revenues from which to extract funds.

The trust between business and the American government is nothing short of legendary. You will not find this type of trust and commitment from either side anywhere else in the world. The headlines may be dripping with stories of the U.S. government and businesses frequently clashing and, certainly, there are disagreements—any healthy relationship has differences to work out. But these disagreements are not true fights. These are petty shouting matches compared to the literal violence that would ensue in other countries, even ones we may consider to be ‘civilized.’

America is as economically prosperous as it is today due almost equally to the government’s conservative involvement as it is to the hard work of those who run the businesses.

It is with great sadness that this dynamic is changing, and it is not for the better. Until the previous decade, the dynamic was advancing—America was doing what it could to make this land a place where businesses could thrive, offering them as much freedom as possible, seriously questioning each law, tax, and regulation to see if it was necessary. This trend has turned backwards. Following the shift in power in 2006 with the Democratic takeover of the U.S. House and Senate, the government has taken to steadily backing up the previous two centuries of business advancement. In December of this year, dividend tax cuts are scheduled to expire, which will raise the tax rate from 15% to 35% (potentially effectively 43.4%). On top of the increasing tax burden from rising property taxes, healthcare taxes, nearly everything in between, taxes are increasingly targeting the wealthiest of Americans.

This is a dangerous tactic. The wealthy have said, and history has shown, that they will park their capital where it is most advantageous for them to do so. As soon as that place stops being America, something eerily similar to what is currently happening to China will take place: The wealthy will leave, and the jobs they fund and provide will leave with them.