Rich people don't move when their taxes go up


#1

[Read the post]


#2

Of course, you well know that when faced with this evidence, the usual suspects being interviewed on all the news-ish shows will tell you that they don’t have time to waste on bullshit, like, y’know, reading studies.


#3

I’m thinking it would depend on the relative rates of taxation between two places and the costs of moving. Rich people are pretty good at figuring stuff like this out.

Back in the '60’s when Britain was taxing the super-wealthy at up to 98%, I wonder how many people left the UK to escape the taxman?


#4


#5

No surprise there. If you’re the type of person who enjoys a beachfront mansion in Malibu it’s unlikely that a relatively modest tax increase will inspire you to pack up and relocate to South Dakota.


#6

One nitpick for that claim/question:

When you hear that someone making $400,000 a year is taxed at 35%, what that means is that for someone making exactly $400,000, only the very last dollar, and that dollar alone, is taxed at.35% The rest is taxed at a lower rate.

If someone was making enough money to hit a 98% tax bracket - and I have some serious doubts about that - it means that they made $millions and $millions and $millions that were taxed at MUCH LOWER rates.

Today, despite higher tax brackets for those with high incomes, thanks to loopholes America’s richest pay a lower overall rate than the middle class.

According to a February 2011 analysis of 2007 IRS statistics by a columnist for Tax Notes, the average taxpayer residing in New York City’s posh Helmsley Building (owned before her death by Leona Helmsley, who once reportedly said that “only the little people pay taxes”) paid only 14.7 percent of his income in federal taxes while New York City janitors and security guards (such as those employed by the Helmsley Building) paid about 24 percent.

Helmsley residents were taxed less for Social Security and Medicare, and much of their $1.17 million average income was in capital gains, which are taxed at the same rate as the wages of modestly paid (up to $34,000 a year) workers.
[Forbes, 2-22-2011; Tax Notes, 2-21-2011]


#7

I feel as though it’s a little like the “if so-and-so wins I’m moving to Canada” line- basically nobody ever does that. Moving, wealthy or no, is a bonafide pain in the ass. It requires uprooting a portion of your life and introducing chaos into the mix.
And once you’re making that much money, who cares? You’re not going to be unable to buy the Ferrari with the options you want because of taxes. The quality of life for the super wealthy is effectively unaffected by taxes.


#8

Well, it depends where the thresholds are, but that’s the general ideal of how tax brackets work. It shouldn’t be a surprise to anybody here because we all pay taxes, right?

Plus, I think it was the Beatles that made the 98% tax claim.

My only point was that rich people will put up with paying more taxes, to a certain point. I think middle class people are the ones most likely to move due to taxes. I have and once my kids are out of school, will likely do so again.


#9

Sales tax hits someone with less wealth much harder than the wealthy. As do fees and fines - for someone making 12k a year a speeding ticket is a catastrophe - for someone making 120k it’s inconvenient - for someone making 1.2 million it’s not even registered.


#10

That’s why in a number of places, things like fines for speeding are calculated as a percentage of your income- so for someone making 12k it’s a small number, and for someone making 1.2 million, it’s… not. But it’s equal in impact.
Makes so much sense they’ll never do it in the US.


#11

Just so. When Mitt Romney was blathering about the 47% not paying taxes, that would apply to federal income tax only. The vast majority of that 47% were retirees, children, military and the disabled.

Even those working (probably harder than Mitt ever did) but not making enough to pay income tax, were still paying payroll taxes.

ALL of them still pay state, county, city, sales, gas, social security, medicare/medicaid, property tax, excise tax on cigarettes and alcohol, etc.


#12

If five percent should seem to small…
Be thankful I don’t take it all.

I think US marginal rates topped out at 90% under Republican President Eisenhower. That era is looked back upon with nostalgia by conservatives as a time when the economy was free to boom, and men were men.


#13

A tax rate that high was also a disincentive to executive pay. When 90% of excessive compensation would go to taxes the companies decided to keep that money for re-investment. Funny how that worked to make the country great eh?


#14

That’s why I like Sanders - he’s like a 1950’s Republican.


#15

Can I start selling t-shirts with that phrase?


#16

so true it makes me cry,


#17

People keep claiming this as a good Republican idea.

Okay, but give me Ike’s entire tax code exactly as it was, with all the deductions and credits as they existed then, with brackets adjusted for the last six decades’ inflation, and I’ll take it with a smile.

Just getting rid of the '70s bracket creep would probably be worth it.

Try to put Ike’s tax rates on today’s tax code, where I basically can’t deduct anything but mortgage interest and contributions, and I’ll fight it tooth and nail.


#18

I seriously considered moving away from the UK when the Conservatives won in 2015. I found out I should have done it back when Labour was in government, and if I did it now I would end up in a worse mess than I am in currently. Apparently paranoia about “scrounging” immigrants isn’t a UK only thing.


#19

And then there’s what refugees arriving in Canada encounter.

(You can just imagine what’s waiting for fleeing Republicans when Hillary wins.)


#20

Of course not, they’re too busy creating jobs!