Lee Kwan Yew of Singapore believes in targeted socialist programs which are implemented to help the very needy while still keeping taxes to a business friendly low. It’s a very carefully calibrated system which owes its uniqueness to the peculiar cultural and geographic variables that make up the Island state. I doubt many countries would be able to replicate this model. Dubai tried but failed due to cultural reasons.
I certainly don’t agree with keeping taxes to the very low level that business wants. Business doesn’t want to pay its fair share, and businessmen are rolling in cash. Businessmen will always invest their money no matter what the taxation level is, as long as it is reasonable. Corporations paid much more % of taxers in the 1930’s-1950’s and even into the 1960’s.
We only recently started dismantling the corporate tax structure, and now corporations contribute almost no taxes (5-10%) compared to the past when they represented perhaps 40-45% of taxes. Corporations invested just as much at the high levels as they did at the low levels. Rich people and businesses have tons of money, and they always try to get more. The way to do that is to invest, and that’s what they do no matter what the tax level is at.
However, when states and countries start competing with each other with lower tax levels, yes, businesses and the rich will tend to gravitate towards nations and states that have lower taxes to get a greater return on their investment.
But within a solid-state economy, there won’t be much difference. As long as they can get a return, they do it. We had an incredible number of rich people in this land when the marginal tax rate was 90% on incomes over $1 million. The rich won’t stop being rich or getting rich just due to high taxes. They will bitch and moan, but they will continue to invest their money and try to increase their wealth.