That's not that difficult to answer that question really. Just look at the data. Where most of the successful start-ups that made it big come from? Start-ups that changed the world (innovation) or created whole new segments of the economy? Amazon, Ebay, Facebook, Microsoft, Apple, GitHub, Oracle, Intel, whatever. Where are they from? France? Israel? Japan? Australia? Canada? Russia? You know the answer. US. And as you pointed out yourself that is where the "anarcho-capitalism" (lol) is, so please connect the dots ;-) (no offense intended) Actually, the only start-up I can think of that made it big and is non-US based is Skype (based of the UK). You know any others in the IT that made it big and created a new market or changed the world or created whole new market segments and are not US-based?

This is the kind of experimental design that would and should fail an undergrad experimental-design course. And I really mean that, I'm not trying to make an ideological point or condescend to you. This is really bad reasoning.

Not only have you jumped to claiming that Correlation Equals Causation, you're not even correlating tax rates (the variable you want to examine) with start-up success. You're correlating national headquarters with start-up success, and then claiming this says something about tax rates.

The fact that US tax rates have themselves varied over time and place is counterevidence against your claim! What does it mean to you if California-with-high-tax-rates produces as many start-ups as California-with-low-tax-rates? Or what does it say about California versus Texas versus New York versus Massachusetts? The actual evidence points towards Silicon Valley being special somehow rather than a general effect from tax rates.

There's also a huge issue with the phrasing, "Start-ups that changed the world (innovation) or created whole new segments of the economy?" To once again reference HPMoR, yes, only your start-ups are in this new reference category you've constructed to include only them by definition.

Let' say I sell the business for $1M. Let's say the tax rate is 46%. So, after 2 years of work and investing $100k in it, I make the math: 1. My last job I made $150k a year. Two years equals $300k in lost income. 2. $100k invested from savings 3. Low quality of life for the family 4. $1,000,000 - $460,000 = $540,000 after taxes. (yes, I know it'll be less because rates are progressive, so let's say: $1,000,000 - $350,000 = $650,000) 5. $650,000 - $100k burnt savings - $300k lost income equals... yeah! I just made $250k profit! While the Government made $350k.

Sheer nonsense. Merely probably opportunity cost is not on the actual accounting books; you could have lost your job the next year anyway. You made $550k and the government got $350k.

Besides, if you already made $150k/year, you're ridiculously fortunate and you have no valid claim to society's pity. You made 61% of the net profits after a 46% tax rate, and for a small start-up sale like $1,000,000 a profit to the founder of $550k is pretty freaking good.

Now look at these numbers again as they explain why you won't see Google or Amazon going out of France or Israel any time soon.

http://mappedinisrael.com/ -- Try and stop us.