Tax hikes are coming. Key proposals by the White House involve an increase in long-term capital gains rates to income tax levels, an increase in the corporate tax rate, and an elimination of the step-up basis on estates. Taken together, they have the effect of creating a confiscatory tax environment. We look at how such confiscatory tax regimes have failed in other countries in the last decade and discuss some of the academic studies that claim to show massive tax evasion by the wealthy. Finally, we debunk the widely-held belief in offshore tax evasion by the wealthy on a massive scale.
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