Income tax up; rich don’t flee

It’s sometimes said that raising taxes, as one might do to combat inequality, will force the rich to flee in droves. But not only did this not happen when the UK recently hiked its top tax rate to 50%; not only is Sweden still home to thousands of wealthy people, despite its 50%+ tax rates; not only is there little evidence generally for this claim.

In fact, sometimes as the reverse, as this quote from the weekly inequality newsletter Too Much shows:

A year ago, in the 2012 elections, voters in California opted to up tax rates on the state’s highest incomes. The vote left California’s deepest pockets with a 13.3 percent tax rate on income over $1 million, the nation’s highest state tax rate. That new rate, opponents of California’s tax-the-rich initiative had predicted, would force a massive exodus of the well-heeled off the left coast. What actually has happened in the year since last November’s voting? California, says a new report, has experienced the nation’s largest increase in residents worth over $30 million. Either the super rich are crying wolf when they vow to flee higher taxes, quips New York magazine’s Kevin Rose, or they just take a long time to pack . . .