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" ... If we had a closed economy of course this wouldn't happen. Closed means that foreigners can't invest in and indigenes can't invest out. Thus in a closed economy that profit tax doesn't make a difference--not unless we're getting to the sort of level where people just stop bothering to invest at all. But the more open the economy, the easier it is to invest in or out, then the more the profits tax will influence the amount of investment. And thus the more the profits tax will lower wages by its imposition. ... "