The brain drain never happened then, obviously.

Richard Murphy says:
August 25 2021 at 9:18 am
They don’t move across borders because of tax

They do move their houses (but usually not far) and their savings

Very different things

But you chose to miss the point as trolls always do because you live in evidence free worlds


Charlie Watts and the rest of ’em never did go into tax exile to record that album. Watts did return, Jagger didn’t. So, from our sample 50% do…..

13 thoughts on “The brain drain never happened then, obviously.”

  1. Bloke in North Dorset

    As he’s only slightly younger than me by just over a year I’m surprised he doesn’t remember the ’60s brain drain debates:

    In the 1960s one of the great debates in the press and at the workplace was the ‘brain drain’. This was the exodus of British talent, particularly from the academic, scientific and technical sectors, usually to the United States. The fear was that the country was being drained of its most skilled people which threatened its status as a major innovative, industrial power. The brain drain was real, and it was fuelled by high taxation and lack of opportunity in the UK.

    But then again his capacity to completely miss the real world that exists in front of his eyes knows no bounds.

  2. “The brain drain was real, and it was fuelled by high taxation and lack of opportunity in the UK.”

    Aye, but it was also fuelled by the much higher salaries paid by American universities and the ease of getting research grants there. So (i) scientists followed the money, and (ii) if that’s not the explanation why did they prefer the US rather than France, Netherlands, Oz, NZ, Switzerland, …?

    Some came back; not everyone warms to American life. Some did go to Oz I assume; I wonder whether many of them came back? It would have been harder to get research grants there, but in many ways it’s a better place to live than much of the US, and, indeed, much of the UK.

    Ah well, no doubt some of their descendants are living in fascist Victoria now. Is that better than, say, proto-fascist Scotland? A matter of taste I dare say.

  3. Lots of Brits went to Australia. Perhaps not the scientists so much, I don’t know, but the Aussies paid the way for a lot of Brits provided they stayed and worked a few years.

  4. I suppose Lewis Hamilton lives in Monaco because he likes the ambiance then? And all those people renouncing US citizenship are doing so as a protest against US foreign policy?

    If people don’t move for tax reasons, why do high tax states in the US have special teams of people trying to butter up high net worth people to not move out of state, as I was reading only the other day?

  5. We have family friends who, in 1968, moved house when Sheffield extended its boundaries to include them, and moved again in 1974 when Sheffield again extended their boundaries to include them. They explicitly stated it was to get out of the clutches of Sheffield’s rates department.

  6. “Lots of Brits went to Australia”: when I worked in Queensland I met a Welsh mining engineer a fair bit older than me. But even of his generation I wondered why any able lad would choose to do a mining engineering degree. Then again I knew a Scot who chose naval architecture. Also bonkers.

    When I was an undergraduate I found that virtually nobody studying mechanical engineering had plans to work in car manufacturing. Highly non-bonkers. That’s when the penny dropped for me – the work force chose the management. If the employees were a bunch of work-shy Bolshies forever going on strike, nobody worth tuppence would want to work in that industry. And, lo, that became a fairly obvious truth about the management of such firms.

    I had a spell working in the petrochemicals business – lots of able people there because the plant operators and so on weren’t arseholes.

  7. And may I just add that my proposition that workforces choose their managements seems never to have been noticed by economists, politicians and such. Why?

  8. I mentioned this over at Samizdata, but it’s worth repeating again here.

    Humans do not avoid posted rates of tax (except the very organised and wealthy for whom tax and asset planning is a part of life), they avoid taxes they feel in their pocket, which is why a rate increase may initially lead to an increase in tax collected, but it eventually declines as people take behavioural and structural responses to avoid such taxation. The most common approach of which is to take yourself and/or your business to a (relatively) lower taxed jurisdiction.

    I did exactly this when I was working as a European consultant for an American company. They didn’t care where in Europe I actually lived (since their head office was in the US) and despite our European office being based in London, we had very few customers there (it was mostly a US prestige thing, the CEO wanted the European office to be London), so when I joined them I simply moved myself, lock-stock-and-barrel to the Isle of Man and paid the much lower rates of tax there rather than UK rate which was more than double and cut my income tax and national insurance payments from £36,000 a year to £9,000.

    I had to give it up after a few years because living out of a suitcase is a pain in the ass, but even though my evidence is personal and anecdotal it does demonstrate that people DO move when taxes are too high, because I did exactly that.

    A good indicator of behavioural responses to excessive taxation are movements of high wealth individuals from high taxing US states (CA, MA, NY, NJ, etc.) to those states without state income tax (like FL). For example the 2016 move of billionaire David Tepper from New Jersey to Florida (nominally “retiring”, but in reality giving himself a tax break from New Jersey state income tax)*

    A more significant form of behavioural response to high taxation (which the high tax campaigner Richard Murphy aka “The Sage of Ely” categorically states “never happens”) is US expatriations, whereby US citizens and Green Card holders give up their citizenship and/or residency after paying significant penalties in expatriation “exit taxes” to escape the tax burdens arising from US citizenship and residence. Probably the most well known of these of recent years was Facebook co-founder Eduardo Saverin who renounced his US citizenship in 2012 and moved to Singapore.

    While not all expatriations are as well known as Mr. Saverin the number of expatriations has been rising steadily to such an extent that those wishing to expatriate are struggling to book appointments at foreign embassies to do so. Given that Sleepy Joe Biden seems to be giving Jimmy Carter a run for his money in terms of eye watering tax rates and the dead hand of the state, expect to see much more of this in the future, despite US efforts to keep a lid on the problem of expatriations.

    Latest US expatriation numbers are distorted by COVID-19 since those wishing to renounce their US citizenship and/or Green Card must do so formally before a US official at a foreign US embassy along with details of their non-US citizenship, since the US is signatory to the 1961 Convention on the Reduction of Statelessness and cannot allow a US Citizen to become deliberately or accidentally stateless. This has been a bit tricky given the effective closure of many borders and reduced access and staff at US embassies.

    2021 2nd Quarter Published Expatriates

    There is no published data on how big the backlog of expatriations is, since only formally completed expatriations are recorded although anecdotal evidence is that there is a substantial backlog of people wishing to expatriate as soon as they are able to do so.

    Samizdata QotD for August 23rd

    * – Mentioned by Jim in the NYT article above.

  9. I know a youngster who moved abroad as an emotional reaction to being required to pay income tax in the 60% band. “62% if you include National Insurance” said I, helpfully.

  10. Bloke in North Dorset

    @John Galt,

    Prof Antony Davies on the FEE podcast recently said the federal government always collects the same amount of money no matter what the tax rate is set at, and that is going back years. He even gave the number (as a % he of income) but off the top of my head I can’t remember it.

  11. John Galt. Entertaining to see who is trying the leave the US and who is trying to get in. One can see who’s paying out and who’s getting the payments.

  12. Prof Antony Davies on the FEE podcast recently said the federal government always collects the same amount of money no matter what the tax rate is set at, and that is going back years. He even gave the number (as a % he of income) but off the top of my head I can’t remember it.

    As I recall, regardless of the vagaries of the US tax system and the ups-and-downs of tax rates (which have varied from marginal to swingeing and back over the decades), they’ve never collected more than the equivalent of 19% of US GDP in taxation. It varies over the decades, but not by more than a few % points either way.

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