Those who understand how inimical taxes are to freedom and prosperity take a different view and look on these developments with great anticipation. Considering the ravenous nature of government, the last thing we should do is lose sleep over its inability to collect taxes. If globalization and technology can provide relief, we should be grateful. But let's not celebrate too soon. True, there are some good signs.
Capital mobility seems to have acted to cap taxes on corporate profits.
Sweden's high personal income tax is causing companies such as the telecommunications firm Ericsson to think of leaving because of problems in attracting good people. Globalization seems to have restrained the growth in government spending in the 1990s. Nevertheless, we must not underestimate the tenacity of governments or their will to maintain the gravy train. As competition drives down their ability to take wealth from producers, they will turn to an age-old solution, the restriction of competition. If it hasn't happened so far, that doesn't mean it won't happen eventually.