

The typical conservative response to that is “but then they’ll take their businesses elsewhere and now you get nothing.”
The typical conservative response also fails to even consider just how difficult, expensive, and risky it is to move a large business to an entirely new region. Real estate has to be purchased and sold, employees have to be relocated or replaced, logistics have to be established in the new region, valuable business connections and contracts will have to be severed, and for brick and mortar businesses, the competitive landscape will be different.





Most people with that little money aren’t going to go out of their way and assume the risk of investing in new ventures. They’re going to put it in some managed or unmanaged fund recommended by someone else, and that money is going to be invested in something safe and presumably profitable on an infinite time scale, like a megacorp (or 500).
It would amazing if the everyday worker’s savings went towards aiding the local community in starting new businesses, but I wouldn’t count on that being the default.