If "businesses will leave" was propaganda, you wouldn't need an exit tax, would you?

If there is an exit tax because companies would leave otherwise, why would someone rational start a new company in the country rather than leave first?

Governments have extraordinary powers to bring individuals and corporations to heel if necessary. Governments can:

- Charge exit taxes on people who "leave". As someone else pointed out, the US already does this with citizens who renounce citizenship (and it applies to long term permanent residents too);

- A lot of assets simply can't leave. Physical assets, land, etc;

- Assets and corporations can be nationalized;

- You can use tariffs and other legislative methods to punish those companies that "leave";

- You can also just deny access to a market for pretty much any reason you want. For example, Huawei is heavily restricted in use in American telecoms infrastructure for "national security" reasons; and

- You can generally impose cvarious levels of capital controls to limit the inflows and outflows of capital in pretty much any way you want. China does this heavily.

China is often criticized because the companies are an extension of the state. That's true. They are. But what we have instead is governments that are extensions of corporations. Can we really say that's working out better?

The US economy is rapidly becoming Russia. Russia has autocratic rule with oligarchs who pay fealty to Putin. In return they can do whatever they want. Do you really think we're different at this point?

Compare that to China. China isn't afraid to "disappear" their billionaires for awhile to bring them into line aka Jack Ma [1]. Exactly where he went and why and what happened is still unclear. China continues to crack down on tax evasion by so called "yin and yang" contracts (eg [2]). And China executed two for a scandal involing tainted baby formula [3].

What do we get? A world where governments can't punish companies for offshoring because that violates "free trade". Companies can take governments to a WTO court. And have.

[1]: https://www.bbc.com/news/technology-56448688

[2]: https://www.globaltimes.cn/page/202403/1309137.shtml

[3]: https://www.theguardian.com/world/2009/nov/24/china-executes...