- in the end, people have to vote with their feet
indeed. And your proposed system will drive out the rich, the intelligent, and the ambitious. Leaving only the poor, stupid, and lazy.
drive them out to where exactly? the country where all the poor people are armed and starving? not likely
I can see that you have a massively distorted view of capitalism, and of economics in general.
Let's say we have two countries, We'll call them Fornitland and Myrkultopia.
Fornitland has a progressive (the rich pay a higher rate) income tax, massively taxes inheritances, especially for the rich, provides everyone a basic living allowance, state-run schooling and healthcare, and basically runs things very socialistically.
Myrkultopia, on the other hand, has little to no taxes, for anyone, provides no living allowance, lets the market provide schooling and healthcare, and basically runs things very capitalistically.
In Fornitland the poor have very little incentive to become rich, for if they do, they'll only be taxed harder, and have most of their hard-earned gains stripped from them when they die. Since they will have their basic needs taken care of regardless, there is very little need for ambition, since no work will get a person little less than working, and hard work will mostly get stripped away. Schools and hospitals, and, indeed any industry which the state deems "necessary for the public good" and nationalizes, are monopolies, with their pay coming not from the customer, but from the state. Since the customer sees no cost, they will use the service at every opportunity (good for schools, if they have the capacity, not so good for hospitals). This leads to supply shortages - overcrowding in schools, long waiting lists and overworked doctors in hospitals. In both of those industries especially, but also in others, supply shortages lead to poor quality service, as teachers struggle to take care of 40+ students at a time, and doctors rush from one patient to the next. Since the service provider sees no loss from poor service - after all, if it's paid for by the state, he gets paid the same for poor service as for good - there's no incentive to improve service, and little incentive for new service providers to enter the field.
Now, let's flee to Myrkultopia - as most of the populace of Fornitland would, eventually. In Myrkultopia there is every incentive for the poor to become rich, since the rich can afford nicer things, and those nicer things don't get taken away. Nor does their hard-earned money get stripped away to feed the unambitious poor. The poor have every incentive to apply themselves profitably to society, and to get the best rate that they can for their services, because if they do not, they will starve, unless they can rely on the charity of friends and family. Schools and hospitals are run on a for-profit basis, and like other service industries, lose money if they do not get customers. Since the poor need schooling and healthcare too, there would be service providers willing to provide for them, but the service may not be as good as that provided to the rich. Still better than the service provided by the state-run hospitals and schools in Fornitland, though. Poor service is rewarded with less money, and good service gets more. If there is a shortage, then the providers can demand more pay, and the high pay rates drive an increase in service providers. Lack of barriers to entry into those - and indeed as many as possible - industries ensure rapid response to increased demand, and provide opportunities for ambitious poor to get a head start on becoming rich.
So, no, people would not flee to "where all the poor people are armed and starving," but to where the poor have opportunity and incentive to become the rich.
just look at ATMs and online banking. i still remember a time when you actually had to talk to people to transfer money. shops selling media like books or dvds are already on death row. fully automated supermarkets are likely a thing for this decade.
I think books, at least, will remain a luxury item, and not disappear. DVDs will probably go away as digital media becomes more prevalent. But a book is an entirely different experience on paper than it is on a screen. People in the future, instead of saying "Oh, wow, look at that bigscreen TV!" will say, "Oh, wow, look at that library!" It will be, once again, a sign of wealth and taste to have a lot of paper books. Many menial jobs will likely be automated. An automated supermarket is a huge capital outlay, though, so it's likely they will be relatively rare. Physical banks will probably go the way of the Dinosaurs, especially if Bitcoin or it's successors catch on. My point being, that automation will take care of a great many things, and shift the workforce, but I doubt robots will ever take care of everything.