Why it might become even more difficult to impasse really high tax rates on the wealthy

Not only is there competition between countries over tax rates, but new countries may soon be setting up. The more elastic the labor supply curve is, the more of a marginal deadweight loss that there is From Robert Frank at the WSJ:

Yet for the rich looking for a way out, Adams also has a solution: movable islands. With yachts already breaking the 500-feet length barrier, it’s not hard to imagine rich guys building what he calls “floating fortresses of awesomeness” free of taxation.

“Out at sea, you can declare your own sovereign state or form alliances with other island-vessels,” he writes. “Taxes would be a thing of the past. Any government-like decisions can be handled through a Facebook page. The only downside would be listening to Ron Paul nagging you to use Twitter instead to keep government small.”

It sounds like parody. But it might be more real than you think. Last year, I wrote about the poorly named but richly outfitted “WHY 58X38,” a 10,000-square-foot motorized island that was devised by Hermes and Wally Yachts.

There were no buyers for the $160 million vessel; it was just a concept. But for your money you would get an outdoor “beach,” a spa, dining room, music room, cinema, suites for 12 guests, lounge and library and pool. It had a top speed of 14 knots.

Even better is the new floating city called Utopia. The project, which is also just concept at this point, has 13 floors and stretches to more than 200 feet high. It has four helipads, its own dock, several swimming pools and as much space as a cruise liner. . . .