One of the classic claims of the wealthy, and their friends on both the political right and in the tax abuse industry, is that if the rich are taxed then they up and leave a place. Except now we know that is not true. A new study by Cristobal Young shows that.
Well, yes and no. But, let’s stick with the results of this one study then, shall we*?
This is, of course, what we could expect. It’s easy to move when you have very little, or when you’re young. It gets harder the older you get. And incidentally, as he finds, when people do move then it’s to the sun, and not for low tax. Again, there’s nothing new in that.
But what does that mean? It means we can tax wealth because the rich stay put.
And we can have progressive taxation.
Well, obviously we can have progressive taxation. We do have progressive taxation after all. And the US tax system is significantly more progressive** than the UK one too. So, agreed. But does that then mean we can tax wealth?
Well, we don’t tax wealth currently, do we? We do tax income from wealth, but not the wealth itself. So, the predictive power of this paper upon the effects of the taxation of wealth is?
*My own anecdata of those USians I know with substantial incomes is that 100% of them moved out of a 10% income tax state into a 0% one. Small sample mind.
**This is using “progressive” in the context of tax systems properly. That is, the progression of average tax rates as income rises. Not what Tuber would claim, high tax rates.