UK Millionaire Exodus Did Not Occur, Study Reveals
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A study by the Tax Justice Network found that the reported 'millionaire exodus' from the UK did not occur, sparking debate on the impact of taxation on wealth migration.
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It started off at 1.2% about 2 decades ago (legislated as a 30% rate on a deemed 4% return), but has increased to 2.1% last year (36% rate on deemed 5.88% return), and in the current government budget proposal is set to increase to 2.8% next year (36% rate on deemed 7.78% return).
Sort of, but it goes back to the overwhelming size of government budgets. In the US for example, even if all of the assets of the wealthiest individuals could be converted 1:1 into cash (it can’t) and the government took 100% of it, congratulations, we’ve fully funded the government for perhaps one year. There’s nowhere to go at that point except to revise the definition of “rich.”
From a quick search:
>> Patriotic Millionaires UK is a nonpartisan network of wealthy individuals in the UK who publicly advocate for higher taxes on the rich and progressive economic reform.
>> Tax Justice UK is a non-profit, politically non-aligned campaigning and advocacy organization working to ensure that everyone benefits from a fair and effective tax system. The group focuses on building a movement for progressive tax reform, pushing for policies that tax wealth and excessive corporate profits at higher rates in order to better fund public services and redistribute wealth
I'm sorry but if someone posts a study conducted by NRA on gun violence, most would view it with suspicion. I think we should probably view this study with suspicion as well given the groups that were conducting it.
https://www.adamsmith.org/millionaire-tracker2024
We should also recognize that, for all but the most mainstream possible questions or topics, most of the study is going to come from interest groups-- they're the ones who are interested enough to do the work to look at the data and publish their results!
If we dismiss reviews like this out-of-hand simply because they are created by an interest group, then we'll miss out on a lot of information and opportunity for reasonable discourse.
(Note that I'm not saying the parent comment is advocating this, but it did raise the point in my mind.)
Source? I'd imagine for public policy think thanks and government agencies make up a significant chunk as well.
A peer reviewed study, with published data and methodology. (it might even be accurate, unless you're a sociologist)
then there is a "study" created by a think tank, PR firm pretending to be a think tank, or a dipshit company pushing something or other.
The latter a good for seeing which rich prick, or group of pricks has the time and money to push a specific agenda. and not much else.
Speaking of - why don’t government services just charge transparent rates for the services they’re providing like any business? Everyone else figures out how to charge for a product or service. A lot of waste is normalized and hidden in the vague sums thrown at agencies, with no competition to drive prices down since it’s a government service. Taxpayers could get better outcomes by pushing for better governance instead of more unjust redistribution continually.
Donald Trump is already president of the US. You are not going to beat him at the "stupid questions about the government" game, so I would just sit back and let him show you how it's done.
It was written by one guy in South Africa who didn’t really do any valid research
Also, the NRA has a long history of suppressing gun violence research in general (through their lobbying efforts of the CDC and NIH, the Dickey Amendment, etc.). This would contribute more to suspicion than anything else.
In this instance there are copious footnotes and citations of data backing up the argument. If they’re falsified, yes, we should disregard the study. But they don’t seem to be.
So whatever exodus occurs will be on the margin, where a few people throw up their hands and go "oh I've had enough".
At the same time, you have plenty of things tying people down: friends and family, business opportunities, kids in school.
Of course, there are lots of other reasons why out-of-staters might choose to move to MA.
NY sources taxes to the employer's office location in NY if a worker works remotely under certain circumstances, for example [1]. If geography can be used to shift or avoid tax exposure to income, I see no problem with using the law to prevent that, depending on the target outcome. My global income is subject to US federal taxes, regardless of my residency (although foreign exclusions apply under a reasonable income threshold, ~$120k/year, under the assumption I am paying taxes where I reside outside the US) [2].
[1] https://www.anchin.com/articles/remote-workers-and-the-conve...
[2] https://www.irs.gov/individuals/international-taxpayers/fore...
I'm not sure how you reasonably allocate state/local taxes other than by physical presence. Any reasonably large company has an economic nexus in many states and even countries.
I wouldn’t call moving to another place to pay less in taxes a virtue.
Are you talking about the very generous pensions for government officials?
If you have say 4 million USD and invest in stocks expecting say 7% per year you will pay 103k USD in cap gain tax and then 44k in wealth tax for a grand total of almost 150k/year.
That's enough to fund Switzerland lifestyle let alone life in multiple other countries that levy 0 or close to 0 cap gain tax for long term gains. It's difference between comfortable retirement and having to work.
Maybe it doesn't make much difference if you're very wealthy but for those who just managed to get financial independence it's huge.
That’s only on realised gains, surely?
And if that’s the case, it’s likely cheaper than having worked for that income.
>>And if that’s the case, it’s likely cheaper than having worked for that income.
How is that relevant? You are investing money already heavily taxed as income before. Anyway, I am just pointing out it makes a significant difference for someone who struck a bit of gold and gained financial independence but is not yet rich.
Because income is income.
That's pretty neat if you ask me
I've come to realize the answer is nearly always NO. They want (and believe they need) more.
But I don't really understand why they spend it on useless baubles. If you spend £50m on a fancy London house, a yacht and a some super cars, most people (British people anyway) will think you are a wanker. But if you spent some of that money on schools and hospitals in a poor country, you would probably be treated like a minor god in that country.
Which according to economists is the wrong way around: it's better to have taxes on land (because it doesn't discourage land existing - land is fixed) than to have taxes on work income (which on the margin, discourages working)
Anyone, residential or commercial, with a mortgage would simultaneously find a massive amount of their net value erased while stuck with huge monthly payments on top of massively increased tax bills, unable to sell assuming the higher taxes drive down property prices.
In a state with fully implemented LVT, you would expect most people in dense cities to be living in multilevel housing that makes more efficient use of land. Eg if your condo building has 5 floors, you're splitting your land tax 5 ways.
Sprawling single level houses would be a relative luxury.
It's not difficult conceptually to come up with schemes to tax wealth which doesn't unduly harm non-wealthy individuals (however you would define that level for these purposes). It's just that for one reason or another these schemes are not implemented, and one of those reasons is (plausibly) the political influence of wealthy individuals
Nimbyism would become even more extreme.
You're gonna fight hard against your neighbor adding a Duplex, triplex, fourplex, etc. because with an LVT your taxes very likely go up as a result.
Imagine the uproar when a developer comes in and converts some of the SFHs next to granny's house into a 4-plex and now granny's social security doesn't cover her taxes and she has to move to the old folks home. Sure she can theoretically take out a mortgage or second mortgage against the theoretical increased land value but now you're forcing granny into debt.
How are you proposing to calculate land value?
Land is worth money because of improvements or detrimental choices. Manhattan and Staten Island have dramatically different valuations because of what’s there.
California needs a sane taxation system that doesn’t allow squatters to pay nothing for property taxes, but harshly punishes new homeowners.
It's worth money because of what's around the land. Otherwise identical houses in different locations would sell for the same price.
Improvements represent applications of labor and capital that produce value.
Is a 1 acre empty lot in Palo Alto worth the same as a 1 acre empty lot in Mobile, Alabama? No improvements on either one so they should go for the same price, right?
That land wasn’t valuable when it was orange groves. The improvements make the place.
He could move and supposedly save money (no income tax in WA, but there are some Capital Gains taxes).
The moving will absolutely happen, and it isn't all or nothing. If you're very wealthy the CA tax board already tracks the number of days you spend in CA so the choice will be to spend fewer.
The people who actually act on this stuff are usually not really wealthy, mostly just retirees finding themselves with a windfall of time and cash, who usually don’t math well.
If you look at Detroit which was a manufacturing hub for a long time, it would be difficult to imagine a world in which they were irrelevant. All these people built lives there and there was all this specialization and industry there. And it worked well until it didn't.
Once a place loses its dynamism and people have had enough, it'll be very hard to get them back
Note also that while the factories moved to China, the wealthy stayed right here in the US, & didn't go where their money was spent.
Different scale, different consequences.
The removal of this non-domiciled status is clearly far more significant than a normal tax increase. The UK was a uniquely attractive destination for the super-rich, because they could enjoy all the amenities of living in London with no real concerns about the tax implications. It is plausible that many of those people will decide to pay UK tax rather than move abroad, but we are talking about an exceptionally highly-mobile group who have already made the decision to move country, many primarily or solely for tax reasons.
indeed thats why to have accountants and lawyers, the issue here is that non-dom meant that you could avoid paying tax on stuff you earnt outside of the UK. for example if you have a lot of income being generated in the USA, then being a non-dom meant that you could avoid paying tax here in the UK at the same time.
For US citizens its a bit harder, as you're liable for tax on all income, regardless of source. I'm not sure how they get round that, debt financing or something similar I imagine
I, as a rich techbro, but not an Uber rich techbro, have to pay ~46% of my income in tax. (even though the majority comes from the US in USD) Don't get me wrong, I earn a fucking kings ransom, and I don't mind paying that amount of tax.
but. If I was earning maybe 4x that amount, I could probably avoid a whole bunch of tax. It doesn't seem correct that the richer you get, the more optional tax is.
In the US many people falsely believe illegal immigrants do exactly that, and that lie has contributed to a lot of outrage, so obviously people perceive the system you're proposing as unjust.
https://itep.org/undocumented-immigrants-taxes-2024/
An illegal / undocumented worker working a standard W-2 paycheck job is going to have taxes withheld and sent in by the employer, even if they never file their own tax return.
Yeah so tax their presence: land, resources usage, consumption. If you insist on taxing their whole world wide revenue don't be surprised when someone living across multiple countries choose one that isn't yours and then you get 0 taxes.
I live across 4-5 countries spending a few months here and there. Fair system would tax me for my presence/consumption/resource usage accordingly. That tax might be progressive (bigger house taxed at higher rate, luxury consumption taxes at higher rate etc.) but shouldn't belong to one country if you care about fairness.
The first is paying your fair share of taxes for enabling the system of rule of law, financial protection, courts, stability provided by national defense, etc. that help you earn that money in the first place. This argues for paying taxes in the country where the money is earned.
The second is the principle of progressive taxation that funds the entire social system where you live -- roads, schools, parks, police, health care, retirement. The richer you are, the higher the rate you can and should give back. Thus it doesn't matter whether you make your money at home or abroad -- it counts toward the taxes you're morally obligated to pay for where you reside and/or are a citizen of.
Because these conflict, the US allows for Americans to let taxes paid abroad count against their US taxes, so they're not double-taxed. Which is one form of a reasonable compromise. There are many other forms you could imagine.
>>Thus it doesn't matter whether you make your money at home or abroad -- it counts toward the taxes you're morally obligated to pay for where you reside and/or are a citizen of.
What about all other countries that were stable and nice enough and allowed me to make money? Why should I be "morally obliged" to pay taxes in a country I didn't choose, that was shitty to me and didn't help me much if at all? I used very little resources there (now I finally moved). It would feel even more unfair if they followed me abroad and required even more taxes.
>>There are many other forms you could imagine.
Yeah, like paying proportionally (or progressively) for resources you use in a country or for business you do in that country. It seems really unfair that my country gets all my taxes for providing very little to me while all other countries that gave me business opportunities got close to nothing (some VAT in EU countries but that's it).
Do you not get police and fire protection? Health care? Rule of law? Urban and rural infrastructure? National defense? Some level of education? Courts that enforce property protection? And so forth?
We often don't see all the benefits our government provides because we take it for granted. But if you ever go visit somewhere where you need to hire bodyguards so that you're not kidnapped while driving, security forces around your compound to prevent it from being looted, and pay constant protection money to the local crime boss so he specifically doesn't kill you and take your stuff... you might realize your taxes pay for a whole lot more than you think.
Obviously every country can do more. But in a democracy that's why we try to vote in candidates who will improve things. And you can always try to move to a better country, if they'll let you. But that's up to them.
(If you live in a dictatorship, then obviously you have more reason to be able to complain since you don't have any legal ability to work for change from within the system.)
I got some of that although I got robbed 3 times in my life and police has done nothing. The point is I got those services at the level of any other citizen. What I really benefited from are other countries than mine which I paid 0 taxes to. It would be fair if I paid proportionally to those at the price they see fit for me doing business there. As it is my (shitty) country got all the taxes how does it make sense?
>>We often don't see all the benefits our government provides because we take it for granted.
My point is that the country gets all my taxes and I pay disproportionally even though it's real other countries (the one I sell to) that made it possible for me to do well. When I spend a few months per year in Spain I don't pay taxes there eithre. I think it's unfair. It would be better if I paid proportionally to my resources usage/time there.
There's your answer. I was in exactly the same position (felt what the country had to offer me was piss-poor, so I left).
Whilst I lived in that country however, _I paid taxes_. A country has costs, just like a household. There's the obvious things like police and other civil servants, but there are also countless invisible costs that go to holding a country together. To say "well I didn't choose to be here anyway" is childish.
It's so easy to say "moral" but I struggle to see the moral principle at play. I understand paying proportionally to resources/wealth in that country. I understand paying progressively for those or income in that country but why pay in proportion to what you have already build in another place?
This is analogous to asking why should software be priced on value delivered, vs priced on costs incurred in producing. Value pricing is much more common.
The value you derive from living in the country of your residence is higher that your poorer neighbors; hence you are charged more.
It is proportional to the resources you use in every case where that is possible. It is nonsensical to say "Well, you used only 2% of police time this year, so that's how much police-tax you'll be paying", not least because it is impossible to put a "usage" on the benefit of having police in the first place. Where it is possible, like how much land you own, you are taxed proportionately.
E.g. Lakshmi Mittal, one of the richest persons in the UK, was rumored to consider moving to the UAE because of the non-dom rule changes.[1] To me it's ridiculous that a person this rich feels such weak control over where they should live. And it's not like moving from the UK to the UAE is like moving from Switzerland to Austria. It's a humongous upset by most measures.
[1] https://www.cityam.com/steel-billionaire-lakshmi-mittal-to-d...
It's the necessities that people will continue to buy (or at least replace with close substitutes), regardless of what happens to the price.
Obviously, in this case it worked out much differently, but no, in general you can't say the wealthy people don't respond to price changes due to their wealth.
You’re living there like everyone else yet using this niche status to avoid paying tax.
"If you are a non-dom ... and you choose not to pay tax in the UK on your overseas earnings, you must pay:
Which means that someone like the wife of previous Prime Minister Rishi Sunak could live in the UK, more or less indefinitely, and pay pretty much no income tax for seven years, then a very middle-class-salaried amount of tax where her earnings could actually be in the many millions. And as non-doms are tax resident in the UK, often they are also not taxed in the country where their money is earned.It's a great big tax dodge and the rest of the UK population was pretty sick of it.
In any case the super-rich are only taxed on income they take out of their businesses. That also limits the benefits of both attracting them, and of exempting them.
I do not see any evidence that there was a net benefit from this exemption.
This is a problem. The UK is experiencing what the US is experiencing so I hope you don't mind.
I'm all invested in the US. My citizenship, my family ties, my finances, and my language. Immigrating to a five-eyes nation would be far easier for me (racism aside).
There's no going back for me and my family, unless I want to immigrate out and start from the very bottom with absolutely nothing.
Because I'm a naturalized US citizen and I'm not white, I also harbor no illusions: There's every reason to believe that if this administration and its extremists continue down its trajectory, I and my family will eventually be subject to the worst.
I'm also not wealthy: So it's in my best interest to be a moderating voice, fight for the values that define my home, be seen giving back/paying it forward, and push for the best outcome for my home.
I'm not sure how to quantify the value add of this, and the wealthy transnationals who distinctly take without being a net positive--because they can so easily relocate--are a large part of the problem.
> The UK is experiencing what the US is experiencing so I hope you don't mind.
Depends in what way? Economically, in some ways. Socially and politically not.
> I'm all invested in the US. My citizenship, my family ties, my finances, and my language
I assume you are saying that to agree with me, in that the super-rich are never invested in one country the same way.
However, I meant invested literally, not metaphorically. Where you invest your money.
> I'm not sure how to quantify the value add of this, and the wealthy transnationals who distinctly take without being a net positive--because they can so easily relocate
Wealthy individuals can relocate. Businesses can relocate some things, but their actual operations are tied to physical assets and to where their employees live.
> I assume you are saying that to agree with me, in that the super-rich are never invested in one country the same way. Yes. In the US and 100 years ago, FDR was called a traitor to his kind. I believe this disconnect remains true today.
> I assume you are saying that to agree with me, in that the super-rich are never invested in one country the same way. Mostly to have a conversation and grumble. I used to work for a UK firm many years ago and so I still have a fondness and soft-spot for (presumably) your country.
> However, I meant invested literally, not metaphorically. Where you invest your money.
Okay, that's certainly easier to measure then. If I recall in the greater London area, the most obvious problem stems from the wealthy parking their wealth in real estate, driving up the cost and lowering the supply for residents? Likewise with other services and products that have started to target only these wealth, making said services out of reach of everyone else.
Not to mention it concentrates the wealth and economy into one or two saturated areas.
Is that a correct summary of the issue at hand?
In so far as its people being dissatisfied with the current state of things, politics dominated big parties that do not want to change things, and the influence of big business lobbies.
I think the problem with drawing a parallel with Brexit is that the EU also has these problems.
> Mostly to have a conversation and grumble.
I can sympathise with that. There is much to grumble about :(
> I used to work for a UK firm many years ago and so I still have a fondness and soft-spot for (presumably) your country.
Nice to know. i am British and Sri Lankan in terms of citizenship, mostly British culturally. I do not say "origin" because that is a bit more complicated.
> Okay, that's certainly easier to measure then. If I recall in the greater London area, the most obvious problem stems from the wealthy parking their wealth in real estate, driving up the cost and lowering the supply for residents?
Yes, definitely, and pretty much nationally.
> Not to mention it concentrates the wealth and economy into one or two saturated areas.
I would say a small group of people rather than areas.
Boo hoo, let them move to some remote tax haven then, and live there next to their money and incorporation documents.
https://www.westminster.gov.uk/council-tax/council-tax-bands...
So where did you get £300K/year from? Or are you saying that is what it should be?
All this talk of "oh but all the rich people will leave and investment will dry up" is really cover for "but my friends don't want to pay tax". We lose nothing (good) by them leaving, if indeed they would anyway.
Yes, it's called the Laffer Curve. https://en.wikipedia.org/wiki/Laffer_curve
Yes a tax environment can be oppressive and make hiring unattractive, but that's not what is relevant to those "cut taxes and I'll hire more people" debates. It's pure nonsense. A drop from 42% to 40% top marginal tax rate is not going to kick off a hiring boom.
It shouldn't surprise anyone that wealthier folk aren't moving to different countries over a tax that is smaller to them, in relative terms, than carbon taxes are to the poor. What is money for, after all, if not to enable you to live the life you want to live? If you need to move to Dubai to avoid taxes, how can you consider yourself wealthy?
Not to excuse Labour's part in this, but this is a side effect of most news outlets being consolidated and owned by relatively few rich people.
In addition you can put any spin on it you like, to suit your agenda.
1. Physical assets, particularly real estate, can't leave. You can't pick up parts of Manhattan and move them elsewhere. Likewise, resource assets like mines, farms and oil wells can't move either; and
2. As long as there's profit to be made, companies won't leave regardless of tax rates. This one comes up a lot with the rent-seeking pharma companies in the US who will sell something here for $1000 but sell it in France for $10. What you have to remember is that if selling for $10 in France wasn't profitable, they wouldn't do it.
The one thing we need to clamp down is allowing people to avoid paying for the society that makes wealth possible. Want to own property in the US? Great. Your worldwide income is now taxable. Want to avoid tax by transferring your "IP" to an Irish subsidiary and then paying royalty payments? Yeah, let's stop that.
We need to stop people getting the benefits of owning assets in a society while avoiding all the obligations.
Any/all attempts to levy more taxes on their vast profits are met with claims that they’ll just pack up and leave, even though the activity would still be profitable.
It never really made sense, but they always manage to drum up enough fear to scupper any plans.
How does society make this wealth possible? Things like roads or schooling or electricity are deserving of a fee for the service provided. Not a perpetual share of your wealth. Imagine if every business you purchase from did the same thing. It doesn’t make sense.
As an example, nothing SF does (as a government) causes it to be a good place to build companies. That’s just network effects between VCs and founders and others. If the ecosystem were elsewhere it would still function just as well.
You're kidding right? A stable society is necessary for wealth to exist. A lot goes into creating a stable society. Education, law and order, roads, access to food and drinking water, affordable shelter and giving people hope for their futures.
War and revolution are the ultimate forms of wealth redistribution. It's why the descendants of the descendants of monarchs and wealthy families don't control all the wealth today.
Leftists (of which I include myself) are demonized by neofeudal serfs who have replaced Catholicism with Capitalism but all we're trying to do is avoid the outcome we're hurtling towards where the heads of the wealthy end up on spikes outside the city walls and we have land reforms.
Unfortunately, you are not going to reach this kind of "temporarily embarrassed millionaire" with logic.
These people think that "wealth" is some kind of magical golden poop that millionaires produce every day from their golden toilets, for the betterment of society. "trickle down" economics I believe they call it.
How do you even begin to talk to someone like that?
It’s just impossible to engage with polarised people. Either you’re open minded and humble, and able to learn, or you’re certain you’re correct and angry about it.
This is social media’s bequest to humanity. I don’t know how people can work for those companies.
Social media was the death of nuance, critical thinking, and self-reflection.
You should take your revolutionary business ideas and make a business with them.
Anyway, I'm gonna go pay my power bill.
This reminds of silly lines like “all tax is theft”.
It’s hard to even counter such absurdities.
I think you’ll find education, infrastructure, the financial system - those small things governments create and maintain - are somewhat essential to having a society that enables companies to exist. I don’t really know what else to say.
The correct way to handle that is a Land Value Tax but nobody is ready for that conversation.
The way to make it sane is to tax local assets, local consumption and doing business at specific location (IP protection revenue based taxes for example). If you attempt to tax world wide assets you will always get a situation when people choose another country to tax them. You can't claim it's exactly your country that deserves all the tax.
> The Tax Justice Network’s review – co-published with Patriotic Millionaires UK and Tax Justice UK – of the Henley report finds that the number of millionaires claimed by Henley & Partners to be leaving countries in “exodus” in 2024 represented near-0% of those countries’ millionaire populations. For example, the 9500 millionaires widely reported to be leaving the UK in 2024 represented 0.3% of the UK’s 3.06 million millionaires.
#1: The data is completely arbitrary, incorrectly compared, and adds no new insights.
The tax changes, AFAIK, are specifically aimed at generating more tax revenue from the foreign millionaires who have been using the UK's non-dom tax advantages, by getting rid of that status.
The counter rhetoric was "if even a fraction of those millionaires leave, the UK will actually lose tax revenue instead."
This article does not report on any actual adjusted numbers to the 9500 millionaires reported leaving, it just says "guys we have a lot more millionaires" — vast majority of whom are not foreign / dom-status, and therefore will not be affected anyways. No new tax revenue from them by eliminating non-dom status. It's apples-to-oranges.
Basically, they're not even using the correct denominator (foreign millionaires).
#2: This was written by an organization seeking to end tax havens, which doesn't really acknowledge that, while calling out the bias of the original report by the organization that helps secure golden visas.
#3: "credited for the UK Labour government’s decision to weaken tax reforms" — it sounds like the original government decision wasn't even passed, though I'm not sure about this, it would mean that you can't say "X didn't cause Y as was predicted" when X didn't actually occur in full.
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