Because it is increasingly easy for investment funds to cross national borders, politicians must exercise a degree of fiscal discipline to attract jobs, capital, and entrepreneurs instead of losing them to another country. This is known as "tax competition" and the United States is the world's biggest winner of this process.
America's modest tax burden, combined with privacy laws for foreigners seeking to escape oppressive fiscal systems, has helped attract more that $9 trillion of foreign investments to the U.S. economy. That inflow is a key source of American prosperity because that money is put to work for the nation and produces more jobs, higher standards of living and general prosperity.
