Silicon Valley is a process, not a place

Today, 4/13/09, the most popular article in WSJ is about taxes. The topic should be of no surprise, given that taxes for many Americans are due in 48 hours. What is surprising for me, though, is the distribution of the tax load:

A very small number of taxpayers -- the 10% of the country that makes more than $92,400 a year -- pay 72.4% of the nation's income taxes.
...those who made less than $44,300 in 2001 -- 60% of the country -- paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden. Their share shrank even when taking into account the payroll tax. In 2001, the bottom 60% paid 16.3% of all taxes; by 2005 their share was down to 14.3%. All the while, this large group of voters made 25.8% of the nation's income.

There's a general expectation out there that the Obama administration will shift the tax burden further in the direction of the top brackets. Since change always creates new problems, we should expect higher demand for solutions that enable high-worth individuals escape this emerging tax problem. How can they do it, besides finding loopholes in the legal code?

Well, if we believe what VCs are telling us, the trend is toward globalization of venture capital. G.S. Burill mentioned it, Janice Roberts of Mayfield Fund talked about it, David Rothkopf described it in detail. So, if we put two and two together, i.e. the increasing tax burden in the US and the shift of VC funds overseas, we can predict that high-risk money will increasingly flow from the US to India and China. Add demographic trends on top of it, and you get two largest emerging markets for technology capital and technology goods/services ever.
Even Warren Buffet, who was always reluctant to invest into high-tech in the US, has decided to acquire a large chunk of a Chinese technology company.

Am I right? And if yes, what does this mean for innovation in the US?