14th November 2012
Most people believe that businesses abhor regulations and would love to do away with them entirely. This belief is often wrong. Many regulations make it harder for startups to enter the market, and can hobble smaller competitors. That’s why incumbent firms in many industries regularly welcome new regulations with open arms, and will spend millions on lobbying to pass them. It’s a way to keep the competition out.
The same logic applies to taxes. Really rich people love high tax rates, because they’re in a better position to avoid them, and it keeps out the almost-rich people who would otherwise compete for luxury-lifestyle goods, such as fancy houses in Aspen and Malibu and limited seating in fancy restaurants and top-tier schools for the kiddies.