When governments restrain investment in public goods out of fear, inequality deepens. Trust erodes. Social mobility stalls.
By Matthew A. McIntosh
Public Historian
Brewminate
A Convenient Panic
It starts with a headline. “Wealthy Britons Flee Tax Hike.” Or in the U.S., “High Earners Abandon California for Texas.” The implication is always the same: raise taxes on the rich, and they will vanish. Take their money. Take their investments. Take their energy and vision. And take them somewhere else.
This narrative resurfaces with every new proposal for progressive taxation, particularly in moments of economic strain or political transition. It is not new. Nor is it particularly true. But it is powerful.
In both the United Kingdom and the United States, claims of a millionaire exodus have served as political weapons more than demographic observations. The myth taps into deeply held anxieties about competitiveness, capital flight, and the supposed fragility of national prosperity. It casts wealth as something that must be appeased, lest it slip away into friendlier climates.
The UK Narrative: More Spectacle Than Substance
In the UK, debate around taxing the wealthy reached a fever pitch in recent years as Labour and other progressive voices pushed for changes to the top tax brackets and reforms to the non-domiciled status. Predictably, critics warned that such changes would drive the rich to more favorable jurisdictions. The City would hollow out. Talent would flee. London, a global hub, would lose its luster.
But the data offers a more sober picture. After the 50p income tax rate was introduced in 2010, the number of high-income earners subject to it actually rose. Tax revenues did not collapse. London remained among the most attractive financial centers in the world. The fears of mass departure proved speculative at best.
This does not mean that no one left. It means the scale was far smaller than the rhetoric suggested. And more importantly, it was not tax alone that determined such decisions. Personal ties, business interests, access to schools and healthcare, and even language and culture all play crucial roles in where people choose to live. Even among the extremely wealthy, life is rarely reducible to a spreadsheet.
The American Version: Red vs. Blue State Theater
In the United States, the millionaire exodus myth has taken on a partisan edge. Blue states like New York, Illinois, and California are routinely accused of pushing the rich away with high taxes, while red states such as Florida and Texas present themselves as open-armed refuges of low-tax freedom.
This narrative gained momentum during the COVID-19 pandemic, when remote work allowed greater flexibility in location and a few prominent names announced high-profile moves. Yet national data tells a different story. Migration patterns among high-income individuals have remained remarkably stable. People move, yes, but mostly for reasons unrelated to taxation. Family, housing costs, climate, and job opportunities still dominate.
Moreover, states like California continue to produce and retain a significant number of wealthy individuals. Its tech sector remains globally dominant. Its venture capital ecosystem is unrivaled. For every headline about a billionaire moving to Miami, there are hundreds of silent decisions made to stay put.
What is often presented as an economic verdict is more accurately understood as a narrative device. The real story is not about who moves. It is about how their movement is interpreted and amplified for political ends.
Narrative as Policy Weapon
The real function of the millionaire exodus myth is not to describe reality but to shape it. It gives political cover to those opposing tax increases. It casts doubt on the feasibility of redistribution. It reframes fairness as fragility, and solidarity as recklessness.
In this framework, the rich are portrayed as delicate assets rather than empowered citizens. Their loyalty is conditional. Their commitment to community, to nation, to the obligations of wealth, is always potentially negotiable. Policy must therefore accommodate, not challenge, their preferences.
This framing also alters public debate. It shifts the burden of proof. Rather than asking why the richest should not contribute more, the question becomes whether asking them to do so is even possible. Tax justice becomes a logistical puzzle instead of a moral imperative.
What Actually Keeps the Wealthy in Place
Contrary to the narrative, the wealthy are not as mobile as they are made out to be. Many are entangled in complex local networks. Their wealth may be invested in immovable assets. Their families are often deeply rooted in particular places. Legal and financial frameworks tie them to jurisdictions in ways that are not easily unraveled.
And even where relocation is possible, it is rarely as beneficial as claimed. Low-tax havens often come with trade-offs in services, infrastructure, or security. High-quality public institutions matter, even to the rich.
There is also a broader sociopolitical dimension. Nations that maintain public trust and cohesion, that invest in shared prosperity, are more likely to remain stable and attractive over time. Tax revenue plays a critical role in sustaining that foundation.
The Cost of Believing the Myth
Perhaps the greatest irony is that the millionaire exodus myth, though ostensibly concerned with protecting wealth, ultimately undermines the conditions that make countries prosperous in the first place. When governments restrain investment in public goods out of fear, inequality deepens. Trust erodes. Social mobility stalls.
Meanwhile, the rich rarely leave. But they do benefit. The myth functions as a form of narrative insulation, protecting privilege by making demands for equity seem dangerous or naïve. A healthy society needs a tax system that works, not one that flinches at shadows. That system should be built on evidence, not anecdotes; on civic responsibility, not economic superstition. The wealthy will not vanish overnight. But the belief that they might has already distorted too many conversations that matter.
Originally published by Brewminate, 07.15.2025, under the terms of a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International license.
