Does big business flee if taxes get too high?

It's often said that you shouldn't raise taxes because big business will flee if you do. Well, Eric Schmidt of Google - yes, him of the aggressive corporate tax avoidance, and possibly beyond even that - doesn't seem to agree:

"Google will continue to invest in the UK no matter what you guys do because the UK is just too important for us."

Another one for our quotations page. Which also contains the opinion of another well known U.S. corporate boss, Paul O'Neill (ex chairman of Alcoa and former US Treasury Secretary:)

"I never made an investment decision based on the tax code. . . If you are giving money away I will take it. If you want to give me inducements for something I am going to do anyway, I will take it. But good business people do not do things because of inducements."

Or try this one, from Warren Buffett:

"I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain."

Which is all fairly obvious, really. If there's a decent post-tax return to be had, the investors will come, whether or not the effective tax rate is 2 percent or 20 percent.

Yet the politicians in Britain, as in many other countries, continue to run terrified from these companies' threats to run away if they dare to stop their relentless programmes of tax cutting and loophole-creating.

Read more about all this here.