If you tax them, will they leave?

This made me research how much taxes would a wealthy californian pay assuming:

- 2.5M worth of real estate bought recently

- 1M of job income

- 1M selling shares that 10xed (some stock option idk)

- driving a 150k $ car

- spending 150k $ over the years in taxable goods

It came around 840'000 $ or around 40.1 %.

I wouldn't say it's that bad, this even includes sales taxes (probably the fairest of all taxes).

With even basic tax optimization (401k, federal deductions) you get that number down to 780'000 $, with something a bit more sophisticated depending on circumstances you can get it easily lower than 600k or 32% ish.

The biggest problem is that people above that tier end up effectively paying less sometimes even in absolute terms just by borrowing against their equity and not triggering taxable events.

Honestly taxes are complicated to implement, I'm not sure how can you implement a progressive yet fair system without loopholes and without severely degrading services (roads, infrastructure, education, healthcare, military, etc, etc).

And every time you decide to cut on services, you are just moving money elsewhere: more inequality -> more social tensions and criminality, you just end up paying way more to live in a safe place and pay for private and public security and prisons.

It's really difficult.

This question is always strikes me as a false dichotomy, i.e. "we have to tax them, or else they leave". The issue is in my view is that constructing a system where the existence of such a rich class has become necessary to raise enough tax revenue. Organizing your country with more sustainable growth where income disparities aren't so high means you don't have this problem to this extent.

How about instead of taxing them any differently than now, we prevent them from borrowing against their assets? Force them to sell their assets and pay capital gains.

Local wealth tax works to some extent, but some will dodge as long as this is not universal.

But universal is what we need as humanity.

The will seems to be building up, even in the UK (Polanski) and US (Mamdani, AOC, Sanders).

I'm betting that the success will be replicated in other countries soon and after that its only a matter of time for this to go global.

But this will be interesting show.

If the OECD decided collectively to tax them there is no where to leave to. They decided on a minimum global cooperate tax, then they can do that same for those 1%.

Of course there are still countries where one could park their money outside the OECD members but many of those are not exactly a "safe" place for such assets.

State taxes can be dodged by moving. Federal (US) taxes are supposed to be filed each year no matter where US-ians live. They can work games to not pay the US but that either requires "no formal income" or living where taxes are higher than the US.

Or, I guess, just don't deal with the US and either don't go there, or hope to not get caught.

Last time I checked, rich people tended to not be very cost sensitive.

at one point Taxes in the US were 70-90%.

did the people ever leave ? NO

Do people move solely because of property taxes? They rarely do unless they are in financial distress. So I'd say: Give it a try.

They certainly have had that effect in Norway: https://www.brusselsreport.eu/2024/09/11/the-failure-of-norw...

> Start-ups and venture-capital investment could begin to flow to lower-tax states; the next hub of technological innovation may end up being seeded in Austin or Miami instead of Silicon Valley.

There is another agent (group of agents) in this game and that's other states. Those states are often modeled as passive background places one can move to, but they are often not. They can, and do, react to tax laws in other states. For example, TX could encourage capital flight by offering tax breaks.

I've seen this happen with some companies in Midwest: as the states had to raise taxes some Southern states decide to poach individual companies and offered them to move their HQs there with a bunch of tax rebates and credits and such.

> The tax’s designers, however, think they’ve come up with a clever solution to capital flight: a one-off tax that is retroactive, based on a billionaire’s residency status on January 1, 2026.

That is pretty clever. They could also have an "exit tax" -- "leave but if you've been here for 10 years making your billions, we'll keep some of those billions" kind of a deal.

The greater issue is we allow the richest to basically print money via their stock based compensation, which allows them to turn unrealized gains into loans backed by these stocks. They can spend that all they want to influence politics and wield illegitimate power. If they can spend this wealth, they can be taxed on it.

Make stock buybacks illegal again too. Overturn Citizen's United unless the head of the company can face charges for the actions of their company.

The concentration of wealth into the highest strata is a recipe for societal collapse seen multiple times in history.

It's worth a shot.

Corporations and billionaires routinely lie in order to maximize their wealth. After all, why not ... they aren't bound by scruples.

The problem with this question is they never mentioned or specified who is "they".

Especially in UK where The Rich that dont belongs to UK in the first place will of course move and leave. Those who are born and raised are highly unlikely to move.

And perhaps most importantly the question completely ignore the real problem. There isn't a lack of Tax revenue, but the government incompetence to allocate and use it wisely. To raise tax is just saying what we are doing now is absolutely correct and we will continue to do so.

They probably won‘t. I recently watched a talk (in german) with Julia Friedrichs, who wrote a book about millionaires and billionaires and did many interviews with them:

https://www.youtube.com/live/4HpJKPywXqY?si=bb-p558jl_otP25I

In her research she found that many of the ultra-rich people actually have deep/patriotic/nostalgic ties to their home/community and want to invest there. They often use certain tax-evasion measures because everybody else does and she argued that those few ultra-rich people who really just care about minimizing their taxes have already moved everything abroad.

The article asserts that, since this is a one-time tax, billionaires will have no incentive to leave: "The tax’s designers, however, think they’ve come up with a clever solution to capital flight: a one-off tax that is retroactive, based on a billionaire’s residency status on January 1, 2026. In other words, unless they’ve already fled the state, billionaires won’t be able to move to avoid paying the tax. 'At this point, there’s no financial incentive to leave California,' Zucman said. 'You’re going to pay the same amount either way.'"

That misses the point. A one-time wealth tax to plug holes in the state's finances reeks of short-termism and desperation, like Chicago selling off its parking meters. Even if I wasn't affected by the tax, I'd be alarmed at the implication. It would have been much better to implement a well thought out and orderly recurring tax on capital gains or whatever.

I don’t want to believe for a second anyone would walk away from Silicon Valley because of being taxed. The impact on the calculus of reward simply doesn’t make sense. On the other hand I am always surprised by people and the strange things we do.

The tax system is made with large incentives for all business owners (from billionaires to small businesses to shareholders like retirees) to invest all profit into expanding their business.

If an owner takes out profit, they are punished with high income taxes. So they reinvest in their business, and this is what the government wants because it creates jobs, innovation, products and services, and tax income.

So they've been doing what they have been forced to do by the government. And as a consequence their companies are worth a lot.

Now the government wants to tax them on the company value?

There needs to be less concentration of wealth and power for our societies to work. Taxing the ultra wealthy should be a nationwide bipartisan project. At the same time, California isn’t the right place for this experiment because it will not solve the fundamentals problem of their government spending and wastefulness.

yes

Mass. passed a high-income surtax a few years ago, with the result that we raied a lot of funds for schools & infrastructure, and we atill have plenty of rich people. Wealthy people hate paying taxes, but after paying, they're still pretty wealthy. And, some of them like living in a state with decent schools, health care, etc.

https://www.peoplespolicyproject.org/2025/11/17/do-millionai...

Here's a better question: do we need them? I'll answer it for you: no. Let them leave. We still have the resources and the productivity. The fact that some asshat that doesn't do fuck all doesn't get to scrape profits for himself is just another advantage, aside from just not having these annoying billionaires around. People need to open their minds to the idea of us just taking their shit for ourselves.

TLDR: yes.

Case study: New York City, United Kingdom, France, Germany, Denmark…

The list goes on until they choose; Texas, Florida, Singapore and Dubai.

Let's do a thought experiment and take it to the extreme: why not tax at the maximum?

We have already tried that in human history, it's called communism. No one is allowed to take private profit, everyone contributes to the best of their own ability, and everyone consumes according to their needs. It should be utopia because there is no wealth gap and wealth is maximally redistributed. Which is exactly what taxation is designed to do, only to the most extreme.

And I think everyone will agree with me that communism is a miserable failure. The rich may not leave physically but mentally they are checkout -- not willing to work as hard or take as much risk. So the answer is yes, if you tax them, most certainly they will leave physically for haven with lower tax, all things being equalled. Or leave mentally.

But not all things are equalled, so you can still tax them at a somewhat higher rate provided that you can provide other incentives. But still, too much tax will make it more likely for those who are able to to leave. This is almost an axiom.

Short term: no

Long term: yes, especially if you combine really high taxes in the 40+% range with consistently rubbish public services

But the real question is not whether people will leave, the question is how many talented hard working people chose not to move to your country in the first place because your taxes were too high. It won't show up in any data, you'll just experience worse economic growth and have to tax everyone else more

In a healthy economy flow of money is like the flow of blood in the arteries. It is what stimulates the economic activity. You can't earn a dollar without someone spending that dollar. Spending = earning = economic activity.

People are always defending rich people (capital owners) that they invest their wealth. But actually if someone has a billion in the bank the fact that they have that billion is a proof that they didn't invest it. (If they did spend it or invest it the would not have it, now would they?)

A billion that circulates in the economy is much better than a billion that sits in someones bank account. Someone who spends 100% of their income is much better economic citizen than someone who doesn't.