“Britain is running a live experiment in how fast you can drain a tax base before you start draining a country. This recent article in The Times reports on a freedom of information request by Wealth Club to HMRC has revealed that the top 1% of taxpayers (circa 500,000 people) contributed nearly £94 billion in tax in 2023/24. That’s a third of all income tax collected. The top 100,000 paid almost a fifth of the national total on their own. At the same time, Britain is losing those very people. The latest Henley Private Wealth Migration Report forecasts £66 billion in wealth leaving the UK this year as record numbers of millionaires move abroad. That follows 10,800 departures in 2024, the highest ever recorded.”
I got this on my Linkedin page, from a chap called John Russo.
Here’s more:
“Critics call this alarmist. They point out that only 0.6% of the UK’s millionaires are leaving. But this misses the point. It’s not the number of people that matters. It’s the volume of capital, the density of investment, and the influence of networks that disappear with them. When a founder, a fund manager, or a family office relocates, their employees, service providers, and charities often follow. The irony is that the UK’s tax system remains among the most progressive in the developed world. Those with higher incomes already contribute the majority of national revenue. But the politics of envy has become the economics of loss.”
Hard to dispute any of this. Read the whole thing, as someone once put it.
Also worth noting that, as Mr Russo said, other jurisdictions could hardly believe their luck:
FWIW, a small comment. Britain makes the exit relatively easy, because it taxes you based on your residency. It is a lot harder for American billionaires since they are taxed based on their citizenship. So Britain is encouraging them to leave, and making it easy to leave. The things that hold people, which usually means capital investment and family ties, are less and less strong as capital goes more digital and families abroad are easy to keep in touch with either over zoom or jumping on your private jet for the weekend.
Last I checked the fraction of income tax paid by the top 1% in the US was about 37%. Not much more than a third, but still more.
It is worth mentioning that the total wealth of the top 100 richest British residents is about about one third of the annual budget of the British government. It you took ALL their wealth you would pay about 33% of annual government spending. And then all the companies that that wealth represents would be out of business, all the workers out of jobs, all the products and services they made gone. So the year after? Would be a nightmare.
One thing many voters don’t understand is that they think wealthy people keep their money as a pool of gold coins in the basement, like Scrooge McDuck. They see the jets and the yachts and think that is what is it all about. But of course that is not true, the money is in the companies they built and is not liquid. Instead it goes to support the companies they own, their customers and employees. So perhaps instead of talking about taxing the rich we should ask if people want their employers taxed, so that they can’t afford pay increases or bonuses or perhaps even to continue to employ them. Because the two things mean the same thing.
Take away Elon’s $80M private jet and it would pay for government’s services for less time than it takes to say “soak the rich”. (That’s not actually true, it would pay for the federal government for 6 minutes, or the British government for about half an hour.)
It’s a spending problem, not a revenue problem.