Yes, Virginia, The Rich Do Indeed Flee From High Tax Countries

By Bernie on 10 Dec 2012

The Rich Do Indeed Flee From High Tax Countries
Photo Credit: Jeff Durham/Bay Area News Group

I do not deny the fact that there are millionaires living in high tax states. Studies (1) have shown that millionaires do not simply move to low tax states to save on income taxes. That said, however, it actually depends on the type of millionaire you are.

If you have a pool-cleaning business generating a million dollar profit annually that caters to the super-wealthy in Hollywood, California (state tax of 10.55% on income over $1 million) you are obviously not going to move your business even a few hundred miles to Washington State (0% state income tax) where there are significantly fewer pools and 5 times fewer millionaires (2) just to save a hundred grand because you certainly won't earn the same million profit in Washington in the pool cleaning business.

On the other hand, suppose you are making that same million a year profit but from dividend income instead. Then it doesn't matter where your main residence is because you can have a second home in California but not be subject to their taxes (California taxes dividends the same as ordinary income). Now it does pay to move out of a high tax state.

So although tax & spend liberals can point to studies showing that many rich people stay put in high tax states, it is also true that many rich people leave. Take for example what happened in Maryland: In 2007 Maryland legislators approved a "millionaire's tax" of 6.25 percent on incomes of more than $1 million a year. The result? According to socialists, it should have been more tax revenues. The actual, real-world result: the state lost $100 million in tax revenues and ended up with a thousand fewer millionaires to fleece (3).

It may not pay those who make only a million dollars a year to flee the state or even the country, but if your income is from investments that make mucho millions then it's a no-brainer that the best thing is to renounce your citizenship and take residence in a no-tax or low-tax country. Eduardo Saverin would have been an idiot to pay hundreds of millions in taxes just so Obama could redistribute that money to an ever-growing number of moochers; see my post Obama and the Transformation of America.

And if the tax rate becomes confiscatory then even those making only a few million a year may find leaving their country more pleasant than sharing their wealth: for example, a third of the population of the Belgian village of Nechin is filled with French who have fled their country in advance of a 75% tax on all earnings over one million euros (4).

When I was 13 years old I grew crystals as a hobby. One of my favorites was potassium aluminum sulfate dodecahydrate crystal which formed an octahedron which looks like two pyramids stuck together at their bases. I noticed that I could dissolve this chemical in great quantities in hot water way beyond its normal saturation point by cooling the solution slowly. I could initiate the crystallization process with a trigger such as introducing a seed crystal or foreign object or shaking the beaker. All super-saturated solutions have a trigger, a tipping point beyond which they can't stand it anymore. They seem to have reached it in France with a 75% tax.

We wait to see what the tipping point will be here in America.



San Jose Mercury News, Superrich stay put in high-tax states like California

An analysis by this newspaper of IRS tax-return data shows that states that charge high income taxes -- from California to New York to New Jersey -- are home to the highest number of rich people per capita. And two-thirds of the states that don't charge any income taxes actually have fewer numbers of millionaire residents per capita, the analysis shows.

(2):, Millionaires of the 50 States, Listed by Number Per 1,000 Households in a State

Income information by number of millionaires per 1,000 households in a state.
RankStateMillionairesPer 1,000 HouseholdsMedian Income
2.New Jersey207,69342.5$59,989
9.New York368,38833.6$46,242
12.New Hampshire26,49832.8$58,223

Information souces: U.S. Census Bureau,, February 27, 2008
Phoenix Marketing International,, February 27, 2008


Planck's Constant, The Laffer Curve or Who is Laughing Now?

The state couldn’t balance its budget last year and created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%, hoping to close the gap, assuming the rich would just bend over and take it.

One year later and one-third of the millionaires have disappeared from Maryland tax rolls 2. Instead of gaining $106 million from millionaires the state lost $100 million.


UK Daily Mail Online, 10 Dec 2012, Gerard Depardieu goes into tax exile in Belgium… 800 YARDS from the French border

French film star Gerard Depardieu has moved into his new 'tax exile' mansion in Belgium - just 800 yards from the border with France.

The 64-year-old actor's lavish home in the village of Nechin - on a street known as Millionaire's Row - is less than two minutes drive from the French town of Roubaix.

Depardieu is the latest wealthy Frenchman fleeing a looming new tax of 75 per cent on all earnings over one million euros - about £850,000.


France's Le Point news magazine said: 'Nechin may be less glamorous than London, Geneva, Brussels and its climate is less pleasant than Monaco, but it has become a tax haven for rich families from northern France.'

Anyone may republish this article for non-commercial use without asking my permission. I make it easy, see details here.

Related Posts with Thumbnails
If this is your first time here, please read my Comment Policy HERE.

comments powered by Disqus



Email Me

FAQ/About Me


Site Policies


My Articles in Danish

Follow Me:

Special Offer For My Muslim Readers: Please subscribe to Planck's Constant Blog. We guarantee a 100% increase in your intelligence.

subscribe to my Feedvia RSS Feed

subscribe to comment Feedvia my Comments Feed

Visit my Pinterest pagevia my Pinterest Feed


Shameless Advertising

This is what Bernie is Reading Now

For Previous Books Click Here.

Buttons & Widgets

Older Buttons

View My Stats

Blogs That Link to Me:

A collection of things...
Always on Watch
Americans Stand with Israel
Animal Magnetism
Apropos of Nothing
Bare Naked Islam
Basil’s Blog
Blazing Cat Fur
Blogging for a free world
Celestial Offerings
Cmblake6's Weblog
Commonsense & Wonder
Conservative Thoughts
Cosmic Cogitations
Cristy Li
Daily Blasphemies
David Drake
DragonLady’s World
Elder of Ziyon
Empyreum Cœlum
Fausta’s Blog
Fiery Spirited Zionist
Gates of Vienna
Gummihund/ Rubberdog and a proud Orangutan
Hard to Swallow
Hodjanernes Blog
Infidel Bloggers Alliance
Intergalactic Source of Truth
Iron Burka
Israel Matzav
Jewish Preppers
Leather Penguin
Maggie’s Notebook
MFS - The Other News
Monkey in the Middle
My Gripes of Wrath
My Newz 'n Ideas
News on the March
Nicholas Hunter Folkes
No Apology
nothing to laugh at
Oswald Bastable’s Ranting
Outside the Camp
Perigo Islâmico (In Portuguese)
Pirate's Cove
pislamonausea Central
Project 2,996
Prune Juice Media
Ramrock's Blog (In Spanish)
Right Nation
Right Pundits
Right Truth
Rosemary’s Thoughts
Sherryx’s Weblog
Silicon Valley Redneck
Simply Jews
Smooth Stone
So Far, So Good ...So What!
Squid Thoughts
Stop Islamic Conquest
Sunday Morning Coffee
Tales of a Wandering Mind
The Amboy Times
The Astute Bloggers
The Christian Defender
The Infidel Task Force
The Lunatic's Asylum
The Mindset
The Old Curmudgeon
The Political Commentator
The Right Nation
The Sandman
The Sassy Tn’T PoLITicallY InCorrect
The Tao of Torah and Rebbi Nachman.
The Unreligious Right
Theo Spark
Third World County
Thoughts From A Seared Conscience
Thunder Pig
usa stands with israel
Veritas Universalis
Western Civilization and Culture
wine women and transcendence
Working the Web
Xanthippa's Chamberpot
Zilla of the Resistance