The most common issue raised by skeptics of wealth taxes is “capital flight”. As discussed in a Tax Notes article, “such a tax would signal to wealthy taxpayers that they should reside elsewhere.” This article goes on to discuss that high-income taxpayers pay the majority of state income taxes in California, and even if a small number of those individuals leave, it could lead to long-term tax collection consequences.
This concern has been underscored by numerous academic studies. Most recently, an NBER working paper co-authored by Jakobsen, Kleven, Kolsrud, Landais, and Munoz finds that 1 one percentage-point increase in the top wealth tax rate in Sweden and Denmark leads to an outward migration of wealthy taxpayers by two percent. Other work in the American Economic Review by Moretti and Wilson documents that variation in jurisdictional taxes significantly influences the location of talent, suggesting that higher tax burdens lead individuals to relocate.
Capital flight is a myth. Wealthy people do business in liberal cities because that’s where all the talent is. Liberal cities are where all the talent is because those places use taxes to improve the quality of life. Wealthy businesses do not attract talented workers; talented workers atteact wealthy businesses.
When NY fought against Amazon getting a sweetheart deal to build a warehouse, bootlickers came out of the woodwork to claim it was a great idea. That NY needed to offer Amazon tax breaks and grants because it would create jobs.
Progressives told Amazon to eat shit. Amazon has continued to beg to be allowed to do business in NY. They are negotiating with the current mayor Mamdani because it’s fuckin NYC, of course they wanna do business there.
This concern has been underscored by numerous academic studies. Most recently, an NBER working paper co-authored by Jakobsen, Kleven, Kolsrud, Landais, and Munoz finds that 1 one percentage-point increase in the top wealth tax rate in Sweden and Denmark leads to an outward migration of wealthy taxpayers by two percent. Other work in the American Economic Review by Moretti and Wilson documents that variation in jurisdictional taxes significantly influences the location of talent, suggesting that higher tax burdens lead individuals to relocate.
Has the concern been met by raising the exit tax to mythical levels? 90% over 100m or something. Is everyone OK with a couple people looting the country and fleeing with all the wealth? Doesn’t seem like a great legal process for the people at home.
What I do not understand is what we should be scared of? If the ones who are not paying taxes flee, what are we losing? I see this all the time that “well if I payed less taxes I would work more” which is pointless from a state perspective since there is no increase in income.
Some people seem to live under the delusion that billionaires carry with them economic growth when they are hoarders of capital. A healthy economy should have a high turnover of capital which can only feasibly happen if the middle class is large. That the size of the middle class is shrinking is not due to the poor, ergo…
They are contributing. They might have businesses in California. They spend money in California for leisure and hiring people to maintain their properties. If they contribute nothing, why are states such as Florida and Texas encouraging them to come?
Businesses do not pay wealth tax and will stay where they are. They’d also be much costlier and harder to relocate than private residences.
A person can only consume so much, regardless of how rich they are (that’s the entire core of the issue here). The gardener trimming their bushes doesn’t really make a difference in the big picture.
States are encouraging them to come because A they are run by politicians who want those sweet donations and B they are run by neoliberals who have bought into the same myth that individuals with wealth automatically create jobs and wealth magically trickles down.
Mamdani may find his desire to stick it to the rich will leave fewer of them to tax in New York City, warned John Ketcham, senior fellow at the Manhattan Institute.
“New York City is losing its competitive edge and Mayor Mamdani makes it far less competitive,” he said.
“Investors and job creators have options and they will go where they’re treated well. Increasingly New York City has treated them inhospitably. New York City leaders have assumed they can’t do business elsewhere, even though we have seen in the last several years a dramatic expansion of the financial sector’s activities in states like Florida and Texas.”
They are contributing. They might have businesses in California. They spend money in California for leisure and hiring people to maintain their properties. If they contribute nothing, why are states such as Florida and Texas encouraging them to come?
I applaud the high quality references, but the wealth taxes studied by Econ are often not the wealth taxes that are in popular discourse.
In particular, the general public, and the few inequality economists like Piketty, Saez, and Zucman, advocate for a billionaires wealth tax. Due to the lack of any sort of data on this, the broader economics profession generally only studies the effects of wealth taxes in the top bracket, which targets the wealthy, but not the ultra wealthy.
The NBER paper you cited is particularly egregious. The claim that a one percentage point increase in the top wealth tax rate leads to capital flight is arguably misleading because Sweden and Denmark have infamously flat taxes (contrary to popular belief). Their top wealth tax applied to singles/couples with a wealth exceeding 1500K/3000K, or about 150K/300K USD.
That is… not very wealthy, and if anything only middle/upper middle class. Not at all what a billionaires tax would target.
The broader evidence is that Sweden has exhibited a serious backsliding in its inequality measures, and the collapse of its welfare state after abolishing wealth taxes.
Billionaire bigwigs Ken Griffin and Marc Rowan are taking thousands of jobs out of the Big Apple and setting their sights elsewhere as a “direct consequence” of Mayor Mamdani’s “tax the rich” antics — stoking fears that a big-money exodus is underway.
Because wealth rapidly becomes illiquid as it increases in value. The capital of the ultra wealthy is intimately tied to physical assets in the real world that makes it difficult for capital flight to occur. They are wealthy because they own the supermarkets, the hospitals, and physical infrastructure.
An example of this is when the UK froze/seized Russian billionaire Abramovich’s assets as part of sanctions, which included the Chelsea Football club. Abramovich (and the media) made a big stink about it, but was ultimately forced to sell.
The case for keeping the ultra wealthy around for their entrepeneurial innovation is inconsistent with broader economic evidence. Bell et al 2019 (QJE) show that although it is true that the young of the top 1% (again, not the ultra wealthy) are 10x more likely to become inventors, the actual causal mechanism is exposure effects, i.e. having strong peer networks.
This is something that is explicitly worsened by abolishing wealth taxes, which are well documented to increase wealth concentration and social mobility.
New York leaders are desperately trying to stop billionaire bigwigs from hightailing it out of the Big Apple with their cash, businesses and thousands of jobs — as fears mount that Mayor Zohran Mamdani’s policies will accelerate the Empire State’s nation-leading loss of wealth.
The splashy one-two punch of Citadel CEO Ken Griffin and Apollo Global Management honcho Marc Rowan pledging to expand outside New York City has been coupled with a silent wave of businesses “quiet quitting” the city over its hostile environment, insiders told The Post.
The desire to be rich encourages people to work hard and innovate. The reason the wealthy want to keep their wealth could be that they desire to use it for something such as starting a business. Elon Musk has several businesses.
From https://www.forbes.com/sites/nathangoldman/2025/11/14/can-a-5-wealth-tax-on-200-billionaires-save-or-sink-california/
The most common issue raised by skeptics of wealth taxes is “capital flight”. As discussed in a Tax Notes article, “such a tax would signal to wealthy taxpayers that they should reside elsewhere.” This article goes on to discuss that high-income taxpayers pay the majority of state income taxes in California, and even if a small number of those individuals leave, it could lead to long-term tax collection consequences.
This concern has been underscored by numerous academic studies. Most recently, an NBER working paper co-authored by Jakobsen, Kleven, Kolsrud, Landais, and Munoz finds that 1 one percentage-point increase in the top wealth tax rate in Sweden and Denmark leads to an outward migration of wealthy taxpayers by two percent. Other work in the American Economic Review by Moretti and Wilson documents that variation in jurisdictional taxes significantly influences the location of talent, suggesting that higher tax burdens lead individuals to relocate.
Capital flight is a myth. Wealthy people do business in liberal cities because that’s where all the talent is. Liberal cities are where all the talent is because those places use taxes to improve the quality of life. Wealthy businesses do not attract talented workers; talented workers atteact wealthy businesses.
When NY fought against Amazon getting a sweetheart deal to build a warehouse, bootlickers came out of the woodwork to claim it was a great idea. That NY needed to offer Amazon tax breaks and grants because it would create jobs.
Progressives told Amazon to eat shit. Amazon has continued to beg to be allowed to do business in NY. They are negotiating with the current mayor Mamdani because it’s fuckin NYC, of course they wanna do business there.
It does occur, but it’s infrequent. Those doing it should be forced to take a further haircut.
From https://www.forbes.com/sites/nathangoldman/2025/11/14/can-a-5-wealth-tax-on-200-billionaires-save-or-sink-california/
This concern has been underscored by numerous academic studies. Most recently, an NBER working paper co-authored by Jakobsen, Kleven, Kolsrud, Landais, and Munoz finds that 1 one percentage-point increase in the top wealth tax rate in Sweden and Denmark leads to an outward migration of wealthy taxpayers by two percent. Other work in the American Economic Review by Moretti and Wilson documents that variation in jurisdictional taxes significantly influences the location of talent, suggesting that higher tax burdens lead individuals to relocate.
Has the concern been met by raising the exit tax to mythical levels? 90% over 100m or something. Is everyone OK with a couple people looting the country and fleeing with all the wealth? Doesn’t seem like a great legal process for the people at home.
What I do not understand is what we should be scared of? If the ones who are not paying taxes flee, what are we losing? I see this all the time that “well if I payed less taxes I would work more” which is pointless from a state perspective since there is no increase in income.
Some people seem to live under the delusion that billionaires carry with them economic growth when they are hoarders of capital. A healthy economy should have a high turnover of capital which can only feasibly happen if the middle class is large. That the size of the middle class is shrinking is not due to the poor, ergo…
They are contributing. They might have businesses in California. They spend money in California for leisure and hiring people to maintain their properties. If they contribute nothing, why are states such as Florida and Texas encouraging them to come?
im sure if you lick their boots reeeaal nice they may even let you lick their ass
Businesses do not pay wealth tax and will stay where they are. They’d also be much costlier and harder to relocate than private residences.
A person can only consume so much, regardless of how rich they are (that’s the entire core of the issue here). The gardener trimming their bushes doesn’t really make a difference in the big picture.
States are encouraging them to come because A they are run by politicians who want those sweet donations and B they are run by neoliberals who have bought into the same myth that individuals with wealth automatically create jobs and wealth magically trickles down.
From https://nypost.com/2026/05/06/us-news/billionaire-ken-griffin-scales-back-nyc-jobs-in-response-to-mamdanis-tax-the-rich-antics-sparking-fears-wealthy-exodus-has-begun/
Mamdani may find his desire to stick it to the rich will leave fewer of them to tax in New York City, warned John Ketcham, senior fellow at the Manhattan Institute.
“New York City is losing its competitive edge and Mayor Mamdani makes it far less competitive,” he said.
“Investors and job creators have options and they will go where they’re treated well. Increasingly New York City has treated them inhospitably. New York City leaders have assumed they can’t do business elsewhere, even though we have seen in the last several years a dramatic expansion of the financial sector’s activities in states like Florida and Texas.”
Yeah, the billionaires pay people to write stuff like that. There’s a reason the Forbes tagline was long “The Capitalist Tool.”
Forbes has long been Hello! magazine for the plutocracy. Endless grovelling puff pieces. Service journalism.
If they arent contributing to begin with why would them leaving be an issue? They’re parasites that keep taking but don’t give back whatsoever.
They are contributing. They might have businesses in California. They spend money in California for leisure and hiring people to maintain their properties. If they contribute nothing, why are states such as Florida and Texas encouraging them to come?
I applaud the high quality references, but the wealth taxes studied by Econ are often not the wealth taxes that are in popular discourse.
In particular, the general public, and the few inequality economists like Piketty, Saez, and Zucman, advocate for a billionaires wealth tax. Due to the lack of any sort of data on this, the broader economics profession generally only studies the effects of wealth taxes in the top bracket, which targets the wealthy, but not the ultra wealthy.
The NBER paper you cited is particularly egregious. The claim that a one percentage point increase in the top wealth tax rate leads to capital flight is arguably misleading because Sweden and Denmark have infamously flat taxes (contrary to popular belief). Their top wealth tax applied to singles/couples with a wealth exceeding 1500K/3000K, or about 150K/300K USD.
That is… not very wealthy, and if anything only middle/upper middle class. Not at all what a billionaires tax would target.
The broader evidence is that Sweden has exhibited a serious backsliding in its inequality measures, and the collapse of its welfare state after abolishing wealth taxes.
‘We got lazy and complacent’: Swedish pensioners explain how abolishing the wealth tax changed their country - https://theconversation.com/we-got-lazy-and-complacent-swedish-pensioners-explain-how-abolishing-the-wealth-tax-changed-their-country-272041
All true, but why would one think the wealthy would not act the same as the ultra-wealthy? The rich might want to keep their wealth because they think they will use it for something such as starting a business. Mamdani is causing billionaires to leave NYC. From https://nypost.com/2026/05/06/us-news/billionaire-ken-griffin-scales-back-nyc-jobs-in-response-to-mamdanis-tax-the-rich-antics-sparking-fears-wealthy-exodus-has-begun/
Billionaire bigwigs Ken Griffin and Marc Rowan are taking thousands of jobs out of the Big Apple and setting their sights elsewhere as a “direct consequence” of Mayor Mamdani’s “tax the rich” antics — stoking fears that a big-money exodus is underway.
Because wealth rapidly becomes illiquid as it increases in value. The capital of the ultra wealthy is intimately tied to physical assets in the real world that makes it difficult for capital flight to occur. They are wealthy because they own the supermarkets, the hospitals, and physical infrastructure.
An example of this is when the UK froze/seized Russian billionaire Abramovich’s assets as part of sanctions, which included the Chelsea Football club. Abramovich (and the media) made a big stink about it, but was ultimately forced to sell.
The case for keeping the ultra wealthy around for their entrepeneurial innovation is inconsistent with broader economic evidence. Bell et al 2019 (QJE) show that although it is true that the young of the top 1% (again, not the ultra wealthy) are 10x more likely to become inventors, the actual causal mechanism is exposure effects, i.e. having strong peer networks.
This is something that is explicitly worsened by abolishing wealth taxes, which are well documented to increase wealth concentration and social mobility.
Who Becomes an Inventor in America? The Importance of Exposure to Innovation* | The Quarterly Journal of Economics | Oxford Academic - https://academic.oup.com/qje/article-abstract/134/2/647/5218522
I suggest you read Zucman’s common wealth tax objections, which addresses most common rebuttals.
https://gabriel-zucman.eu/files/saez-zucman-wealthtaxobjections.pdf
If capital flight is difficult why are billionaires leaving NYC. From https://nypost.com/2026/05/08/us-news/ny-leaders-desperately-try-to-stop-billionaire-bigs-from-fleeing-city-over-mamdani/
New York leaders are desperately trying to stop billionaire bigwigs from hightailing it out of the Big Apple with their cash, businesses and thousands of jobs — as fears mount that Mayor Zohran Mamdani’s policies will accelerate the Empire State’s nation-leading loss of wealth.
The splashy one-two punch of Citadel CEO Ken Griffin and Apollo Global Management honcho Marc Rowan pledging to expand outside New York City has been coupled with a silent wave of businesses “quiet quitting” the city over its hostile environment, insiders told The Post.
The desire to be rich encourages people to work hard and innovate. The reason the wealthy want to keep their wealth could be that they desire to use it for something such as starting a business. Elon Musk has several businesses.
The New York Post is a Murdoch propaganda tabloid. If that’s the best source you’ve got, you shouldn’t even bother.