
If you tax the rich, they won't leave - pmoriarty
https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats
======
for_i_in_range
I did. Virgin Islands (U.S.). Paid 4% in taxes and saved over $800k in taxes
over 2 years. Others are doing the same via Puerto Rico. I’m lucky in that I
got out before this hurricane season destroyed everything though.

~~~
ihsw2
Exactly. The cost to move off-shore is only getting lower and its knowledge
becoming more wide-spread -- what this means is you no longer require "high"
net-worth to access these "special" services.

~~~
chiefalchemist
True. But it I think it misses the root crux of the issue. That is, you can
now leave the USA and enjoy the same (read: close enough) "amenities" for a
lower personal investment.

That said, it might not be a brain drain per se but without infrastructure the
mighty machine for printing money (often refereed to at the USA) becomes less
and less effective.

C'est Le Capitalism, isn't it? Money first, all else - including country - a
distance second.

------
ryandrake
And even if they do leave, so what? Actually, that sounds kind of great!
Reverse-gentrification. The fewer multimillionaires in my neighborhood
distorting demand, the more affordable everything will be for the rest of us.
I'd offer to buy them a one-way plane ticket but I'm sure they can afford it.

~~~
Finnucane
When I hear someone say "I'm going to leave the country because of taxes" I
say, don't let the door hit your ass on the way out.

~~~
chiefalchemist
Ditto. If they're not here to help and stick it out with the rest of us let
them go. As the saying goes: "If you're not part of the solution then you're
part of the problem."

The truth is, they (i.e., the ultra wealthy) need us more than we need need
them. A Kickstarter to buy them one-way tickets out might be the best
collective investment we'll ever make :)

------
LeifCarrotson
> People with high levels of education have very high mobility – but only for
> a short period after finishing their education. ... Migration is a young
> person’s game, and moving overwhelmingly occurs when people are starting
> their careers.

> If millionaires were mostly college-going twentysomethings not yet tied to
> place by career or family responsibilities, place-based income tax systems
> would face serious challenges.

The data does suggest that, to a degree, but it may be better explained by a
combination of age plus education and careers rather than single-focused
career-mindedness.

It's just an anecdote, but in my experience 40-year-olds stay put because of
their kids and homes, not because they couldn't find a career somewhere else.
Someone a few years out of college with no kids can pack up their apartment
into a few bags and try out something new on a whim. That gets more difficult
with age and additional connections to an area.

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kpommerenke
Flagging this article because you disagree with the data presented or its
conclusion seems to violate the spirit of Hacker News.

------
jbb67
Yeah, it's the guardian. Don't think this isn't an editorial piece pushing an
agenda

~~~
donatj
I came here to rant that "Never thought I'd see the day The Guardian was a top
posts on HN"

~~~
mfoy_
As one of the uninitiated... why?

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uptown
The state of Connecticut disagrees.

~~~
johnhenry
Not trying to troll, but do you have data for Connecticut that contradicts the
data presented in the article?

~~~
throwaway2016a
Not proof but a strong anecdote. My parents have lived in Connecticut for
their entire life (they are in their 70's) and are thinking of leaving. The
primary reason they cite is taxes. And that is personal income, sales,
property and estate tax, and my parents are middle class not rich.

Many people I know are doing the same thing.

But I'm not sure it is all taxes. A lot of jobs are leaving CT for the
business powerhouses of New York City and Boston. So there are few jobs and
very little incentive for young people to stay because there is nothing for
them in the state.

I left CT for Boston MA for college when I turned 18. I will never move back
to that state in a billion years even with family still there.

~~~
actsasbuffoon
Connecticut's estate tax only applies to estates worth over $2,000,000. Either
that doesn't apply to your parents' estate, or they're probably doing better
than middle class.

Connecticut's income tax ranges from 3%-6.7%, which is pretty decent. The
upper percentage is almost the same as my state's lowest! Admittedly, my state
has higher than average income tax rates.

~~~
throwaway2016a
I misspoke, I should have included sales and property tax. When you take sales
tax into consideration Connecticut has a much higher burden than just
considering income alone. Edited my post accordingly.

> Connecticut's estate tax only applies to estates worth over $2,000,000.
> Either that doesn't apply to your parents' estate, or they're probably doing
> better than middle class.

There is a third option. He actually saved what the retirement planners
recommend you save. Never went on vacations, never bought any luxuries, and
was generally very frugal.

My father literally put every penny he had past food and shelter into
retirement savings... add 60 years of interest, dividends, and market gains
and $2M is not so crazy.

It also helps that he bought his house for $50k 40 years ago and it is now
worth quite a bit more.

When he was working he was upper middle class for sure but still firmly in the
middle class. He was also upper middle because he worked a blue collar job
with plenty of overtime options and literally worked close to 40 hours of
overtime a week for 50 years. The truly upper class don't need to work 80
hours a week.

Is he typical? No way. Would I even want to lie like that? No way either. But
it is how he is able to be effected by estate tax and still be middle class.

------
rrggrr
I'm not sure this article is accurate. I started here:

[https://mises.org/blog/california-illinois-and-new-york-
keep...](https://mises.org/blog/california-illinois-and-new-york-keep-losing-
people-other-states)

>This is why places with highly progressive income taxes –

>such as New York and California – still thrive as centres

>for talent and elite economic success.

It it tax policy, or is it the thriving academic|tech|financial mass that
accumulated due to historical events, an attractive climate, and defense
related spending? I'm pretty sure its not tax policy.

>Migration is a young person’s game, and moving

>overwhelmingly occurs when people are starting

>their careers. By the time people hit their early forties, PhDs, college
grads and high

>school drop-outs all show the same low rate of migration.

Is it primarily young people migrating? I ask because two generations of cold
climate dwellers have migrated to Florida, Arizona, North Carolin and
California. This has left many of their former states with high taxes and
declining populations.

And according to the Tax Foundation: "Between 1999 and 2010, high-tax New
York, New Jersey, and California lost about 1.2 million individual taxpayers
and more than $97 billion of personal income. This does not include the
corporate losses. Meanwhile, low-tax Nevada, Wyoming, and South Dakota –not
known for their magnificent climates – gained about 172 thousand individual
taxpayers and $15 billion of personal income during the same period, again not
including corporate losses. People are moving to these states and their money
is following. Certainly this trend is not a coincidence."

------
gadders
The millionaires may not physically relocate, but what about their money? I
would guess they stay where they are but use more elaborate tax planning.

There is a reason why the Laffer Curve exists.
[https://en.wikipedia.org/wiki/Laffer_curve](https://en.wikipedia.org/wiki/Laffer_curve)

~~~
tatersolid
Not just their money, but their businesses. Here in Illinois, business of all
types are relocating to Indiana, Iowa, etc. The jobs go with them, even if the
rich owners still reside in IL. I have many personal anecdotes confirming this
trend.

There’s even a political ad running now where governors of neighboring states
thank the inept Illinois Assembly leadership for all the new jobs and tax base
in recent years.

------
candiodari
How does taxing the rich matter ? The 0.1% on top you can't tax. Just won't
work. And to boot, won't matter in the budget.

Then the 0.1% - 1% doesn't matter if you tax them, since they mostly (>50%)
get money from taxpayers in the first place. I mean, I love the rightist "make
money go round" argument, but what's the point. Obviously these people will
simply demand more money from the government and judging by past performance
doing that, they will succeed at this.

I don't know what the solution is, but outright increasing taxes will make the
problem worse.

~~~
ivcha
If we think about this as a wealth pyramid (a quite narrow one), then perhaps
the answer is taxing progressively up the pyramid until the very top is
reached. Otherwise, I agree, there's no clear solution to this, unfortunately.

------
chevas
Anecdotal, but I have one multi-millionaire friend who left California
strictly because of taxes. It takes a certain type of personality to just up
and do it and he exemplifies whatever personality trait that is.

Millionaires are established, and the article goes into reasons why they don't
move around. However, what potential effect does higher taxes have on people
starting businesses or thinking about starting one?

~~~
ihsw2
I would argue that their wealth composition determines their capacity to move
around -- or, more to the point, how liquid their assets are. Real-estate
owners are obviously anchored to the land that their property occupies,
naturally.

One potential effect is that earned income (ie: wages and salaries) would
precipitously fall much faster than cost of living, resulting in the drying up
of credit and causing a credit crunch/housing crisis.

------
malchow
There are literally billboards on 101 in Palo Alto inviting people to leave
California, and they will, if taxes, regulation, and zoning do not lighten.

~~~
madengr
The local U-Haul place had "Free Gas to California".

------
qrbLPHiKpiux
They won't, because they can't. Where else are they going to go?

~~~
cgore
The rich are the most capable of leaving. Even if they don't leave, they can
have their money leave by playing silly games with corporate structuring or
whatever, which they are the most capable of doing.

