When Millionaires Say They're Leaving—They Almost Never Do

Forbes

3 days ago

Phil White, a British millionaire poses with a placard reading: "Tax the rich" next to the Congress ... More centre during the World Economic Forum (WEF) annual meeting in Davos on January 18, 2023. - Tax me and tax people like me urges in an interview with AFP Phil White, a British millionaire present at the Davos forum, believing that wealth inequalities fragment the world. (Photo by Fabrice COFFRINI / AFP) (Photo by FABRICE COFFRINI/AFP via Getty Images)
Every time a government proposes ticking up taxes on the wealthy, however modestly, the same rote routine begins: High-net-worth individuals, their accountants in tow, emerge to provide quotes informing the public that, sadly, they will now be forced to flee to some jurisdiction that has no designs on taxing their income. The threat is immediate and existential in scale—they're being driven away like a protected species poached to near extinction.
The latest revival of this performance comes courtesy of the United Kingdom, where the government closed a centuries-old tax loophole that let wealthy foreigners reside in the U.K. but insist their income did not. The global rich are now in full performative retreat from London—selling their properties and booking one-way flights to elsewhere. Estate agents lament, tabloids predict doom for the tax base, and everyone seems certain that London's days as a center of commerce are numbered.
Across the Atlantic, the same chorus plays in a slightly different accent. In New York, when Assemblymember Zohran Mamdani proposed a millionaire's tax, the upper crust began auditioning for the same role as put-upon wealth creator in search of a steamship to Florida.
But here's the thing: they almost never really leave. If they do, it's in such small numbers that the fiscal impact is negligible at worst and, often, positive. We've seen this performance before.
U.K Closes a Loophole, Wealthy Pack Their Bags (or Say They Will)
In the U.K. the 'non-dom' regime was a tax perk long enjoyed by the ultra-wealthy. It permitted wealthy foreigners to live in Britain without paying tax on overseas income. In effect, it allowed the global elite to buy an address in London and enjoy the related public goods without contributing meaningfully to His Majesty's Revenue and Customs (HMRC). All the perks of residency, none of the fiscal responsibility.
This spring, the U.K. government finally did the unthinkable and closed the non-dom loophole. The ascendant tax regime was projected to bring in £12.7 billion by 2030. To be fair, some of the beneficiaries of the old regime did seem to start heading for the exits. Several high-profile billionaires moved abroad and real estate sales in the poshest neighborhoods did fall.
Anecdotes snap together like magnets and, from there, the narrative accelerates. There is a certain common-sense element to the idea that raising taxes on the wealthy will cause them to leave, so ad-hoc stories are all that is necessary to move many from assumption to certainty—the wealthy are on the move. The same argument was made the last time the U.K. trimmed non-dom benefits, in 2017. Back then, only 2% of the affected group actually left the country. The rest stuck around and paid 50% more in tax. The rich are better at making threats than following them and the media credulously reports on the bluster.
Meanwhile, in New York
New York faces down its own elite melodrama. Assemblymember and Mayoral candidate Zohran Mamdani, a democratic socialist with a preference for policy over donor appeasement, has proposed a state-level millionaire's tax.
The reaction was instant. Business leaders issued grave warnings and his opponent conjured up images of a mass exodus to Florida. It seems the mere suggestion that the ultra-rich should pay a few percentage points more toward public transit or housing sends the elites into a private jet fuel-up pantomime.
There is precedent in the U.S. to mirror that in the U.K.—when California raised taxes on high earners in 2010, despite opponents warning of an economic death spiral, California's share of the nation's million-dollar earners went up. Today, nearly one in five U.S. millionaires live in the Golden State.
The myth of the millionaire on the move is politically useful but empirically bankrupt. Study after study, in Europe, the United States, and elsewhere, tells the same story: millionaires are even less likely to move than the general population. In the U.S. just 2.4% of millionaires move across state lines in a given year—below the national average of 2.9%.
And yet, the myth persists—why?
Why the Chased-Away Millionaire Myth Persists
If the data doesn't support the millionaire migratory narrative, why is it still treated like gospel every time someone proposes a new tax bracket?
Because it isn't really about economics—it's about politics. The threat of wealthy flight is a potent rhetorical weapon because it allows opponents of progressive taxation to cloak themselves in a self-serving argument that sounds in fiscal prudence rather than protection of the donor class.
Opponents of progressive taxation can assure taxpayers they aren't defending inequality but are instead just exerting common sense policymaking to ensure the budget can be kept intact. It's austerity wrapped in the language of inevitability.
The myth also thrives on anecdote. A billionaire leaves London for Dubai, and within the confines of one newspaper article a universe is created where the entire country is hemorrhaging wealth. One hedge fund manager moves to Florida and the lights are flipped off in New York. And yet, for every high-profile departure anecdote splashed across the headlines, there are thousands of high earners doing nothing of the sort.
America in particular loves the image of the rugged capitalist jetsetter that can pull up stakes and relocate anywhere. The notion that the ultra-rich are nomads, unattached to place and ready to vanish abroad if offended, reflects the myth of individualism.
And yet, it doesn't square with the reality that most wealthy people, like their less well-appointed counterparts, are deeply tied to their communities, industries, and local institutions. The board seat on the local nonprofit or country club doesn't fit in the luggage compartment of a private jet.
Nonetheless, the myth will linger. In part because it provides cover, not just for the ultra-rich but also for the lawmakers who fear crossing them and offending their constituents in almost equal measure. The result is a political Pavlovian response where even modest tax reforms come with a side of millionaire exodus think-pieces.