That awareness has, in turn, made it easier to push back against well-worn arguments that any new tax would, sooner or later, affect middle- and lower-income households and that any attempt to demand more from wealthy companies and individuals would cause them to flee the state for somewhere cheaper, resulting in lost jobs and a weaker economy.
Research based on census data and Internal Revenue Service records does not tend to bear these arguments out. Rather, it shows that the primary reasons for affluent people to move from one state to another are work opportunities, family and lifestyle choices, with taxation a distant consideration in most cases if it comes up at all. The same holds for companies whose success is often rooted in their geographical location and in the staff they have hired and come to depend on. “Millionaire tax flight is occurring,” Michael Mazerov of the Center on Budget and Policy Priorities has written, “but only at the margins of statistical and socio-economic significance.”
All economics happens at the margin. What matters is how much margin?
A buddy/sometime business partner moved out of CA to WA precisely and only for tax reasons. And, yes, he’s now thinking about moving again as a result of this WA attempt to tax the rich again. And, sure, that’s the margin. But how much margin is the iportant thing, right?
To be fair, there are so many reasons to leave the UK, that it is hard to identify which one is the most significant. I moved overseas 16 years ago for work opportunities and I won’t be rushing back thanks to the accelerating enshittification of Third World Britain. The photos of feral diversity rioting for giggles down the road from where I used to live in London isn’t pulling me back for sure.
However, tax and regulation is a significant part of the mix: when I left the UK it was as an entrepreneur and even then the regulatory burden was considerable. Now, I am an employee again. If I returned to the UK I would need a 50% pay rise to have the same take home.
We know that these taxes absolutely would hit middle and lower income households eventually.They said the same thing about income tax.
No doubt they’ll be able to con a lot of people that only “wealthy companies and individuals” would pay it but it is a con.
Look at all the people being dragged into the higher rate tax bracket. What a crock that is: real wages are stagnant but you get taxed more due to inflation.
I’ve just reviewed my Mum’s finances as the end of March was approaching. All her little bits of pension add up to enough that she’s now nudged over the tax allowance and will have to pay income tax.
A marginal number of people can, as WA is finding out, make an enormous difference to overall tax revenues
Oh and there is of course no correlation at all between tax burden and “work opportunities”!
And yet California U-Haul trucks pile up in Texas and Florida.
Yeah, they “don’t move for tax reasons”, but they just happen coincidentally to all move from high-tax States to low-tax States.
From Grok, what ‘only at the margins’ means:
These are the most widely cited sources:
California’s state and local government debt and unfunded liabilities is roughly $1.6 trillion, or about $125,000 of debt per California household.
They really can’t afford to lose billionaires, but there’s no telling them that of course.
Loads have left – the tech bros on the All In podcast are always banging on about it.
My favourite example – basically just a different species of the same idiocy – was when Elon Musk threatened to move Tesla out of the state if it didn’t let him reopen his factory during the Covid scam.
California Assemblywoman Lorena Gonzalez tweeted ‘Fuck Elon Musk’ by way of reply.
Musk in turn replied: ‘Message received.’
Tesla and all of its jobs are now elsewhere.
I reminded myself of this story by reading a Hill piece, which went on:
California has highly subsidised a company that has always disregarded worker safety and well-being, has it? Interesting.
It’s also that tech bros don’t really need to be there now.
Palo Alto became a big tech place because it’s where William Shockley’s mother lived. So he moved there with his family, started Shockley Semiconductor, and everything followed that. That led to Intel and other chip companies. That led to companies like Apple and Sun selling computers and Atari making games. That led to the internet. You get network effects with that. Like shoemakers in Northamptonshire and sports car makers in Modena.
Remote work has broken the network. You don’t really need to be near Palo Alto any longer. It’s the same story in the UK, which is why London house prices have fallen post-Covid.
California hasn’t caught up with the new reality. They could tax hard because there was value to being there and that’s gone into decline.
I read that Shockley was impossible to work for so all the people he hired quit and started their own companies, leading to the network effects you speak of.
Impossible to work with?
So there might be a concentration of tax campaigners around Ely?
Remote work has broken the network…which is why London house prices have fallen post-Covid.
Perhaps that’s part of the story, but it’s much more complicated than that. London house prices have fallen for many complex and interacting reasons including:-
[1] Buyers seeking more living space after covid have reduced demand for flats, which make up about 60% of the capital’s sales. In 2025, approximately 41% of new-build flats in London were sold at a loss.
[2] A glut of homes hitting the market as landlords sell up to avoid higher taxes and stricter regulations. Roughly one-third of London properties currently for sale were formerly rented homes.
[3] And a Labour government, of course…economic uncertainty…abolition of non-dom status…possible introduction of a mansion tax…more white flight…Iran war…increasing enshitiffication of some London areas…
Savills and Chestertons claim the London market will improve later in 2026 – if interest rates decline – though they expect growth to be 1%–2% (ie below inflation)…but estate agents fly kites…
And, here in Suffolk – anecdata alert! – those wealthy London buyers who bought coastal or inland boltholes post-Covid seem to be selling up and moving back to London. Once the novelty wears off, rural life – with its mud, invasive wildlife, lack of services, relative isolation, etc – doesn’t appeal to metropolitans when they find the nearest gym is 45-60 minutes away and they have to drive 15 minutes to the nearest sour dough bakery…
My wife and I lived in Cornwall for about a year; she hated it with a passion, being a girl from SW London. Luckily I got posted to Germany for three years, returning to Berkshire. About 10 years later I was told I was being sent back to Camborne. I was given the ultimatum, resign or separate: I resigned.
Cornwall’s coast is beautiful, but Camborne is a bit grim. And Cornwall is wet, so, overall, an urban womaj would find it a challenge…
We have a holiday let near the Suffolk coast. Some of the complaints we get from townies are amusing — “infested with spiders” [er…exaggeration, but you are in the countryside, love], “there were rats in the roof, keeping us awake” [not rats…birds and squirrels (aka tree rats, if you like), but you are in the countryside, love]…etc
Her main concern was the lack of decent (in her opinion) shops. The traffic was also a pain; this was back when the A30 still ran through the centre of town.
There’s probably other factors, but there’s also been effects with New York and San Jose.
“Once the novelty wears off, rural life – with its mud, invasive wildlife, lack of services, relative isolation, etc – doesn’t appeal to metropolitans when they find the nearest gym is 45-60 minutes away and they have to drive 15 minutes to the nearest sour dough bakery…”
Oh I remember reading a woman complaining there was nothing for her kids to do after moving to Stow-on-the-Wold. Yeah, it’s in the middle of nowhere, love. Didn’t you go there, do some basic checks on Google Maps.
Some friends of mine moved out of London to Witney which is a top choice.
Not quite. Elon certainly moved as much as he could out of California, especially headquarters, but SpaceX still has it’s original office in Hawthorn, CA and support operations at Vandenberg Space Force Base, Tesla still operates the Fremont Gigafactory. Twitter/X still operates from offices in San Jose and the Bay Area and xAI operates out of Palo Alto.
The Gigafactory is hard to move without damaging Tesla production. Twitter/X and xAI are hard to move because the folks involved live-and-work in the Bay Area and are largely unwilling to relocate.
SpaceX is hard to move because of Vandenberg launches and a lot of the specialised military stuff that launches there.
“At the margin”.
It’s a pretty sure thing that Musk is really unlikely to open anything new in California.
This is probably the biggest problem here. Not that you see companies up sticks and leave but that no-one creates new companies, adds more to it. It’s a big cost to move a factory but when you have to choose where to put a new one, you go where it adds up.
I stand corrected, but you take my point. The silly twats lost a lot of revenue over one stupid tweet.
SpaceX needs to be near the equator to launch space vehicles into orbit.
That’s why they are in Brownsville, TX. Further South than KSC, I think. Vandenberg only launches South for polar orbits, and for those it doesn’t really matter how far away from the Equator you are.
Starbase Texas is right up against the Mexican border. Not much further South they could go. The Mexicans get a good view of the launch from their side of the border.
Ummmm… Not at all…
An equatorial launch pad makes it *cheaper* to launch to geostationary orbits.
If you don’t mind whatever you shoot up moving relative to the Earth’s surface, you can basically launch from anywhere.
Being on the equator saves *some* fuel ( = mass = expense), but that’s only at best about 10% for geostationary orbit speed compared to a true polar launch for geostationary.
For LEO the gain is even less, given that the speed needed to stay up at 200-1000km is almost three times that of a geostationary orbit.
(those geostationaries have decent thrusters/thruster package because they need to *slow down* from launch…… )
In fact, for something like Starlink you don’t even *want* an equatorial launch, because for transient coverage like Starlink, you want an orbit angled to the equatorial plane.
Getting further away from the equator gives you that angle *without* having to spend extra delta-v ( or far less ) to adjust the orbit *away* from the equatorial plane, and then once again to stabilise it.
There’s not many high net worth individuals working in factories, even Gigafactories, and most of those that do could probably remote work.
Who is Guardian’s audience for this article? They are telling the proles to go ahead and attack wealth, that the wealthy will just leave is phony concern.
“Go ahead, you CAN take their money!”
Leaving is just one of several actions the wealthy will take. Those that stay are not simply going to just pay up. They will plot.
“Overtax the wealthy” is a commie tantrum that will not lead to more state revenue. Many commies probably know that. Hurting the rich is their goal. Any talk about what can be done with the revenue is a trick to get people to accept it. “It’s okay to take people’s money if you do good things with it.”
A couple we used to know had lived for decades in California. She retired with a good California schoolteacher’s pension. They promptly moved to Washington state. They’d have laughed at the proposition that tax considerations were negligible for them and their like-minded friends.
Most wealthy people didn’t get that way by being stupid. Guardian wants people to believe the wealthy are stupid.
“We don’t have to kill them. They will just let us take their stuff.”
In the 1960s/1970s the very wealthy left the UK but so did the not so wealthy, The Brain Drain it was called. They left because of high taxation, high inflation, lack of opportunity in a Nationalised State-run economy.
The more money taken in tax = less money to spend on a comfortable lifestyle. The notion that money (taxes) isn’t the primary motivator is delusional.
Conservatives are always making the argument about economics happening at the margin or that if wealth leaves tax collections will go down forcing the government to tax the less wealthy more. Or go bust. What we often fail to grasp is that progressives just plain don’t want us. They don’t want rich people. They don’t want economic growth. They really don’t want many of the shiny new things that entrepreneurial types might create, especially if they enable those same entrepreneurs to get rich. They envision a poorer society run, by as Tim likes to say, Fat Controllers.
I spotted this article a while ago and will quote from it.
https://newrepublic.com/article/207888/democrats-wealth-taxes-super-rich
It’s soak the rich time. Presidents Clinton, Obama, and Biden all raised taxes on the rich, so this isn’t new for Democrats. But there are three important shifts happening. First of all, Democrats at the state level are aggressively pushing tax hikes, ignoring perennial threats from the wealthy that they will move to other states if their taxes go up. Secondly, Democrats are no longer framing their tax increases on the wealthy solely as measures to fund programs for average Americans. They are leaning into populist rhetoric, arguing that America’s superwealthy simply have too much money and taking some of that away is a public good on its own. Third, the federal proposals are bigger and more comprehensive than before, attempting to tax all the myriad ways the superrich earn and save money.
Their vision is of a tightly constrained world where everyone lives in tiny little apartments, walks or takes a bus or train, doesn’t travel abroad, doesn’t have much money, and at least in Europe – has their speech constrained. When we tell them of the downside of their plans they are starting to respond with greater honesty – that the downsides are the goals.
Correct. The commies’ goal is the destruction of wealth. They want everyone dependent on the state. That everyone may starve is of no concern to them.
As tots we had family friends who moved to escape Sheffield when they expanded their boundaries in 1968. They then moved again when Sheffield expanded again in 1974, Each time they moved less than a mile over the border, continuing to work in Sheffield, and explicitly to get out of The Social Republic of Sheffield’s tax base.
There is a real-world experiment that tests this: Incline Village is on the north-east shore of Lake Tahoe, in Nevada. I commented to my sister, who at the time worked in the semi-conductor industry, about the fact that I had two different (fairly specialized) software packages, both of which came from companies located in Incline Vilage. I wondered at the idea that a small ski town would be a software hub. She told me that it was common in Silicon Valley for successful businesses to relocate to the Nevada side of Tahoe. It is close enough to the Bay area that it is an easy commute if you need to meet, it is in the same time zone, and you’re living in a ski village. Oh, and while California has high and progressive income tax, Nevada has no state income tax. The attraction is obvious.
But why were they looking for jobs in that other location, and why are they open to the disruption of an inter-state move, rather than remaining in the same familiar location, and in the same job market, with the same level of taxation? If you’re determined not to find something, you can be pretty sure you won’t find it.
Some years ago my CPA told me that one of his clients shifted his business to Nevada with the comment that “he liked living in California, but he didn’t like it enough to pay $200,000 per year in taxes”. Obviously he had a high income, and Incline Village is full of affluent California refugees. I’ve often been surprised at the number of people I know who’ve shifted to Gardnerville or Minden, neither of which grab me as especially joyful places to live, but the taxes are less and you can get a big house for less.
When I was working in central NJ 25 years ago, quite a few of my co-workers chose to live in PA and commute 50 miles each way (TBF that section of I-80 is a pretty easy drive). Tax was a major factor in their choice, alongside property costs.
IRS keeps its records private. Unless your name is Trump.
The IRS could tell you how many taxpayers changed their residence between states (and possibly cities or counties) in a year, and whether the shift was from a higher tax rate jurisdiction to lower rate jurisdiction, or vice-versa. They couldn’t say anything about the motivation for the move, of course.