The Millionaire Man Exodus: What Obama Can Learn From The UK's "Tax The Rich" Plan

Tyler Durden's picture

Regardless if the Fiscal Cliff is resolved tomorrow (impossible), on December 31 (unlikely), or in tandem with the debt ceiling hike some time in March 2013, after all the government fund buffers have been soaked dry as they were back in August 2011 (most likely), one thing is certain: America's wealthiest (billionaires and millionaires) are about to see their taxes soar - that's more or less a given.

The question is what happens then. Will, the wealthiest - those who have access to and can buy banking, incorporation, citizenship and legal services in any global jurisdiction in a world that has never been this decentralized and this , take it all quietly up until that point on the Laffer curve says they will commit mass suicide, or maybe, just maybe, because they don't feel like being force to pay uncle Sam even more than they currently do with the proceeds not used for something constructive like paying down debt, but instead to fund government corruption and inefficiency, they will pick up and leave without saying goodbye or even looking back, and in the process crush future US government tax revenues even more and send the deficit soaring more. After all it is the "1%" who pay 30% of all income tax. This means roughly about $600 billion in tax revenues annually.

"No risk in that", many will say - after all where can they go? Well, apparently many places. Because if the UK, where as the Telegraph reports a stunning two-thirds of domestic millionaires opted to leave the country than pay a "punitive" 50% tax, is any indication it is possible that the imminent tax hike on America's wealthiest is going to be one of the most destructive things that can happen to America's already unsustainable budget deficit.

From Telegraph:

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.


This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.


The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.


It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.


Last night, Harriet Baldwin, the Conservative MP who uncovered the latest figures, said: “Labour’s ideological tax hike led to a tax cull of millionaires.


Far from raising funds, it actually cost the UK £7 billion in lost tax revenue.


Labour now needs to admit that their policies resulted in millionaires paying less tax and come clean about whether they would reintroduce this failed policy if they were in power.


Mr Osborne argued earlier this year that the 50p rate was deterring entrepreneurs from coming to Britain.

It appears that at least the UK has learned its lesson:

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Sadly, even with this largely cosmetic move, the UK too is grappling with a far bigger issue: it has never been about revenue. It is all about spending. And both in the UK and the US government spending is simply too big. How big? So big that all tax revenues couldn't fund just the mandatory payments (which exclude military spending), let alone discretionary.

But both the UK and US know that revealing this little factoid would lead to the beginning of the end, as the realization that the welfare state myth, which has perpetuated a tenuous peace in the "developed world" ever since the advent of Otto von Bismark, has been one big lie. And anyway, with some additional money still entering the ponzi system, one does not need to pull the plug on it just yet: it will likely last at least one or two more years before it all comes crashing down.

Yet while the UK learned the hard way that in today's world jumping on one's G-6 timeshare private jet and becoming a citizen of XYZ takes a few hours top of preparation and execution, the US is only now going to learn this very hard lesson.

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Pareto's picture

I like this interpretation best, though I agree with all of the ZH's leaning towards the exits.  But thats how i feel about taxes....taxes that keep fucking going up and never down.  It is about control.  I save.  I'm frugal in fact that we have an 80's television set that serves a dual purpose: (1) to watch TV and (2) security - because when any thug giving thought to robbing the place just has to look in my front window to see "nope there's fuck all worth grabbing here."  I make a decent salary with bonus and my wife has a good job too.  We don't feel like we're geting ahead at all.  So you work harder, save more, spend less (which at this point means having little to no social life at all), and little fucking changes in terms of wealth accumulation.  Taxes go up, price of food goes up, the trasport fees for your natural gas, phone, and electricty all go up, so that net net, you're the same or worse off depite the extra effort.

Natural gas wasn't a nickel over $3/gig last year.  We had the warmest fucking winter EVER, and our gas bill was fucking more than it was than in prior years.  Its bullshit.  Its like Carlin says "they got you by the fucking balls."  Its true.  Unfortunately, maybe I should care more about where the government pisses my dollars.  But, does it really count for anything worrying about it since nobody gives a fuck anyways?  Its why I focus on what I can do, and is why when I think of taxes, i'm not thinking revenues, I'm thinking of the measure of control it seems to have.  ZH's and austrians are right, it is a spending problem and its a problem because I'm NOT the one spending it!!  Over 6 months of the year I work for somebody else (Tax freedom day is somewheres around late June) - not sure who, but, I know it sure as hell isn't for myself.  This has to change.  When I spend more time working for somebody else than I do for myself, that's when capitalism becomes socialism - and there is nothing "free" about that. 

sgt_doom's picture

"Taxing the rich..."

Getting your money back from the super-crooks ain't about taxation, its called legal recovery.


Ellen Schultz's Retirement Heist,

Nomi Prins' Other People's Money,

Battling Wall Street: the Kennedy presidency, by Donald Gibson

Thy Will Be Done, by Gerard Colby with Charlott Dennett

The Fine Print, by David Cay Johnston

Treasure Islands, by Nicholas Shaxson


nobusiness's picture

I am a tax accountant and 3 of my biggest clients left the US officially last year.  2 expatriated returning there US passport (went to singapore, no tax) and a UK Citizen who was resident in the US for 10 years moved to the bahamas (no cap gains tax).  Combined 3 million of ny taxes and 7 mil of federal tax gone.

CH1's picture

Good for them!!!

Fuck the state.

Winston Churchill's picture

I'm not an accountant, but nearly all my clients are worth north of $20mill.

With 5 or six billionaires in that group.People you've never heard of ,because that's how

they want it.All are actively moving capital and jobs offshore now.

If Obummer wants their money,he'd best bring in capital controls now.

Capital has never been more fungible than now,Plenty of countrys will gladly take

the owners of it.

Obummer talks, and money walks.

poor fella's picture

Did they bring any jobs with them besides the need for maids and professional ass-wipers? Just saying, many of the biggest clients really don't produce anything except non-compete roadblocks to their competition and the production of overseas sweatshops..  If so, good fucking riddance.

Gout in the Bahamas doesn't sound like a lifestyle I'd enjoy.

Zero Govt's picture

there's a difference between productive rich and parasite rich 

the parasite rich were grouped around Bummas Presidential table the other day at the White House. Propped up State pussies like Jef Immelt at GE

know the difference as one set impoverishes and cheats you, while the productive rich provides every advance in wealth, comfort and progress we enjoy since they took us out of caves

poor fella's picture

completely agree. 

There are those like Palmisano, Blankfein, and Mozilo that I will be toasting a quick and tidy expiration with any luck and justice in this universe of ours. (And that Honeywell bitch, damn that guy's been front and center for months).

It's amazing (and telling) that TBTF = TBT be indicted! 

GeorgeHayduke's picture

Gee poor fella, you're throwing a wet blanket all over the myths and fantasies of the Rand disciples around here.

Actually clearing some of this useless wealthy dead wood out of our society might open things up for the rest of us as their boots come off our throats. Government isn't the only thing that can keep people down, but the Randians have this mythical free market fantasy where wealthy folks compete on the same playing field as everyone else, and they ALL built their wealth through hard work, fair play and free market principles. Such is the nature of a religion.

Besides the government they hate so much has proven to be a useful tool for the extremely wealthy, although their hatred strangely only extends to the government and not those pulling their strings. These folks usually are stuck in the Cold War mentality still whining endlessly about communism and socialism when fascism, and predatory crony capitalism and oligarchy are the obvious threats we are facing.

poor fella's picture

When one hears the wax poetic from a like-minded being regarding the backdrop of corruption that's becoming the American and global norm - I find a smile. + that!

schadenfreude's picture


What's the share of Banks on S&P earnings? If bankers leave to Singapore (lot of free space to, because of taxation, what could be better for the country?

hawk nation's picture

I design and build homes for wealthy people and this policy of taxing the rich is hurting my business andmy employees

Wealthy people are not investing in the usa

These clients also happen to be good moral people that are easy to work with and allow a person to make a profit

Colonial Intent's picture

"These clients also happen to be good moral people that are easy to work with and allow a person to make a profit"

If they have morals how did they get rich, win a lottery?

TahoeBilly2012's picture

If the Stones and Beatles can split (and they did) anyone can!

TulsaTime's picture

I call bullshit on the mass exodus of millionaire greed-baggers.  They have to be in a place where the money and markets come together and they can have anything at anytime.  They just get a bigger incentive to employ the best and the brightest in financial loop-hole-ery.  There are always so many ways around everything that might pass, why else would all those bills go to hundreds and thousands of pages if not to keep the accountants busy?

And what crap is the fiscal cliff anyway?  The terrible thing and the thing to fix it are the same, raise taxes and cut spending.  Really?  I don't think that makes for a real crisis, except to financial types, so that make this just like the last time.  Wow, who would have thought they might try the same schtick again?   So off the cliff we go, and haircuts like scalp mutilation to the bond holders all.  This is going to hurt like hell, and we look forward to seeing every twist and turn of it for the tip of the tippy top. 

Shit gets real someday soon.

sgt_doom's picture

"fiscal cliff" --- excellent point.

The media should be reporting on the chopping block, when we've rolled the mobile guillotines outside the congressional building and the US Supreme Court.....

Guillotine operation --- now that's my dream job.

Magnum's picture

Maybe because you are not yourself aware of the opportunities which exist outside of America, or what life is like away from your own country of birth.  

I find USA to be still a good place but sliding directly in the wrong direction, so the only logical thought is to consider where to relocate.  

Twice in the last year I've spent a few weeks in parts of Europe and Scandinavia where it's nearly impossible to find a police officer.  Crime is nonexistent, as are desperate homeless beggars and general louts of society.  

So what's it like to live among white people behaving themselves?  Quite the feeling of freedom.  Great place to raise a family (I have kids).  US schools are no place for creativity, while their Scandinavian counterparts seem to have the right mix.  

Lots of pro-business policies exist overseas as well.  You can't even run a lemonade stand here without endless permits and fees--this is always what I laugh about when sheeple say America is land of the free.  The truth is opposite--compared to the rest of the world we have less freedom especially to do business.  Now is a golden era of opportunity for Americans of my generation to go start businesses in foreign countries, your American mind will find all kinds of opportunities. 

There is indeed a lot of talk about high taxes in Europe and Scandinavia but one has to look at the big picture of what legal residence and an eventual foreign citizenship entails.  The only main problem for now is that when traveling there I have to exchange wimpy dollars which have shrunk in strength over the last 20 years, it's beyond recognition.  This drastic fall in $ purchasing power overseas is just another reason why people with money see the writing on the wall and are planning to leave.  Or maybe it's just the eccentric ones like myself.  

ThisIsBob's picture

There was more liberty in this country under George III, then there is today. 

11b40's picture

So, you are a Socialist, and dream of living in the worker's paradise? ;-)


11b40's picture

Too funny!

Magnum lauds the virtues of re-locating to Northern Europe, one of the most socialistic regions on the planet, and gets 18 up arrows with no downs.  Would someone like to tell us what the tax rates are there?

I point out this odd fact & get 9 down arrows.

This site sure has attracted it's share of morons over the past couple of years.  That old line from an Eagle's song comes to mind -- call someplace paradise & watch it die.

Papasmurf's picture

"The terrible thing and the thing to fix it are the same, raise taxes and cut spending.  Really?  I don't think that makes for a real crisis, except to financial types, so that make this just like the last time. "

That's why CNBC is currently a 24/7 infomercial on the "fiscal cliff".   Regular scheduled pump & dump will continue once the status quo is kicked down the road.



yogibear's picture

When the wealthy leave Obama and the democrats can sieze 401Ks and IRAs (including Roths).

Raiding wealth from the remaining people and distributing it to the Free Stuff Army, their largest voting segment.


surf0766's picture

my 60 year old golfing retired baby boomer asshole neighbor needs a wealth tax. He voted B.O and is now complaining about potentially paying higher taxes.

Zero Govt's picture

if voters like your neighbour ever spent more than 20 minutes researching the lying charlatans they elect they'd be like the majority of voters and not vote at all

let's hear it for 'democracy' depending on a rice paper thin veneer of BS and sheeple sleep-walking through life to stay afloat

Mr Lennon Hendrix's picture

The NWO operates on expectations.  Imagine, rich men all over the Western World are now contemplating moving to Third World Nation-States so they can save their pennies.

Then, there is a worldwide financial collapse, the World Bank, IMF, and BIS inform the Central Banks (who never had any alligence to their respected Sovereign States they governed the money supplies for) they will now institute a "One World Currency".  This will mean it doesn't matter where you live.  There will be no more seperate constitutions.  There will be a One World Order.

But since the rich men of the world had already concidered leaving their homes they will say, "No big deal!  I was already not thinking like a citizen anymore!"

This is exactly why Mark Carney was appointed Chairman of the BoE.  Because soon there will be no more boundaries.  Soon there will be one world of equal oppurtunity concerning monetary value.  These expectations are now being tempered.

FranSix's picture

So take a job that is surviveable, but low on wages, be part of the 99%, and you will be considered to pay taxes on your salary, and your capital gains will not see 50% taxes, but be taxed at your tax rate based on wages.  I can see a Will Farrel movie coming on.

Yen Cross's picture

 Zippedy DOO DAA/ I just exited a "small jet" , fuck heads!

stant's picture

capital flees to where its treated best.

FunkyOldGeezer's picture

Meanwhile the man in the street pays a good 65% in direct and indirect taxes with no chance of lowering them and little chance of upping sticks, because the taxes are designed to just about let him live and no more.

...and Zero Hedge, what's with the deliberate sensationalism? Read it more carefully, they either moved abroad, or more likely, had their accountants scheme away until their taxable incomes magically were less than a million. It's not as if any would have been paying the full 50% tax, or anything like it.


rowntree's picture

This was a very poorly researched article.  It refers to the number of returns filed in the year with over 1 million in income.  However, the base fiscal year had the FTSE going up by about 45%, while it only went up by ~5% the following year.  Independent of tax rates, there would be a much larger number of returns filed making large sums of money the first year than the second.

I also would like tax rates to stay low, but this isn't really support for that.

Urban Redneck's picture

So the Central Bank should juice the stock market to raise tax revenues, that would be up there with giving free money to banks so that they can give big bonuses.

Regardless, raises taxes appears not to have raised revenue as was claimed it would by the fair share fucktards across the pond, regardless of whether the cause was exodus, going Galt, of realized capital gains on equities (which could be verified by the muppets if they were really interested in the answer, as opposed to a redundant effort to make Gordon Brown look like fool.

Orly's picture

"Regardless, raises taxes appears not to have raised revenue as was claimed..."


Seems you're starting to listen to David Stockman.

That's good.  At least then you'll get off your silly soapbox about paying taxes that are properly owed to a sovereign nation.

There may be hope for you yet, Redneck.



Oh, and Brown did what he had to do to allow the price of gold get to this price level in order to sink the Chinese and enslave the Indians.  It's all in the plan.

Acet's picture

Well this is the Telegraph and they consistently put a pro-Tory spin on everything (they're even known as the Torygraph).

Since the Tories (the party in Government) reduced the top tax rate from 50% back to 45% and there has been increasing noises from pretty much everybody about how they're the party of the rich and the bankers, disconnected from the common-man's reality and that the austerity seems to be only for the riff-raff (the only group whose real income is going up is the top 1%), it's likelly this article was researched using the "this is what we want to prove, so get things that help prove our theory and ignore the ones that disprove it"-method and put out as a whitewash.

Remember, this is Britain: most newspapers are just propaganda mouthpices.

Colonial Intent's picture

"Remember, this is Britain: most newspapers are just propaganda mouthpices."


BraveSirRobin's picture

I believe the article referenced income, not cap gains in the filings. I could be wrong.

Joebloinvestor's picture

Just another reason for more government jobs to chase tax cheats.


littleguy's picture

Sounds like Labour logic to me. Coming to a socialist European utopia near you soon.

Crtrvlt's picture

where will they receive their income then?  us sourced income is taxed here.  not to mention, did this happen under the clinton years?  or maybe there are less millionaires in the uk partly because they got their face ripped off from the recession only to be subsequantly bailed out.  

Piranhanoia's picture

Why someone would leave the Carcass of London, after having stolen enough to cause suspicion, with a way out that doesn't include getting vaporised, to a sunnier clime where a million buys a billion,  etc..

is not a fair comparison, is it?

TroyPDX's picture

The statists always go for the most simplistic solution to any problem. Here that will be capital controls and perhaps even making expatriation illegal. 

Blazed's picture

"The statists always go for the most simplistic solution to any problem. Here that will be capital controls and perhaps even making expatriation illegal."


Yeah, he will learn to not let them out, communist style!

Cultural Capital's picture

Honest to god, I plan on adopting a child overseas instead of bringing a child into this world with the burden of US citizenship.  FATCA is going to do more harm than 9-11. 

blunderdog's picture

But...see...the SPENDING issue is never going to be addressed as long as Fedgov can continue to finance unlimited deficits.

Raising taxes and driving the rich out of the country and dropping revenue may turn out to be a step in the right direction.

EITHER the deficit climbs tremendously and Congress starts thinking a new approach will be required, OR many of the biggest criminals who've been ripping off the country go away and we continue muddling along with the current bullshit.

Where's the downside?

vegas's picture

Like this is somehow a surprise? The corrupt pols think increased taxes won't change behavior; what a bunch of fucking morons. Amerika gets what it deserves because the "have nots" have just recently decided that the country needs to be a socialist banana republic. Let the brain drain and capital flight begin; long live John Galt.

Spastica Rex's picture

I think after a certain level of wealth creation,  people shouldn't be taxed at all - say maybe 5 million in assets, and you never pay another iota of tax again. It would encourage productive behavior. All capable people would get rich. All takers would need to FOAD. Everybody (that counts) wins.

falak pema's picture

the spice of life comes from hunger and adventure; when u are in the realm of oligarchs you work according to the famous quote : making your first million is an achievement, going from 100 to 110 is inevitable.

It kills the hunger and the adventure of being a trail blazer, when u get there.

Witness our current times : our millionaires of old  are now billionaires and they are all on the rollercoaster going to hell! They can't help themselves in their greed gone mad.

When you lose the sense of value, you lose yourself and your millions. But Mankiewicz never told us that! 

Ah to go back to the days of the barefoot contessa of my childhood! 

I'm sure all those shills would love that. Time's arrow only goes one way, we are not in that movie!

And, taxes are a man made brake to stop the hubris from spiking; like it has now; to spread the capital manure around for it to breed more new sprouts.

We don't do that anymore.  We just play at the Casino more n more like addicts on the roller coaster.

Spastica Rex's picture

You (nearly) always make me smile.


Orly's picture

And speaking of the Barefoot Contessa...

You must try her meatloaf!


Ina Garten

  • For meatloaf:

  • 2 tablespoons good olive oil

  • 2 cups chopped Spanish onion (1 large)

  • 1 1/2 cups small-diced celery (2 stalks)

  • 1 pound ground beef

  • 1 pound ground veal

  • 1 pound ground pork

  • 1 tablespoon chopped fresh flat-leaf parsley

  • 1 tablespoon chopped fresh thyme leaves

  • 1 tablespoon chopped fresh chives

  • 3 extra-large eggs, lightly beaten

  • 2/3 cup whole milk

  • 2 tablespoons kosher salt

  • 1 tablespoon freshly ground black pepper

  • 2 1/2 cups panko (Japanese bread flakes)

  • Garlic Sauce (recipe follows)

  • For garlic sauce:

  • 1/2 cup good olive oil

  • 10 garlic cloves, peeled

  • 2 cups chicken stock, preferably homemade

  • 3 tablespoons unsalted butter, at room temperature

  • Kosher salt and freshly ground black pepper


For meatloaf:

Preheat the oven to 350 degrees.

Heat the olive oil in a large (12-inch) saute pan over medium heat. Add the onion and celery and cook for 5 to 7 minutes, stirring occasionally, until the onion is translucent but not browned. Set aside to cool slightly.

Place the beef, veal, pork, parsley, thyme, chives, eggs, milk, salt and pepper in a large mixing bowl. Put the panko in a food processor fitted with the steel blade and process until the panko is finely ground.

Add the onion mixture and the panko to the meat mixture. With clean hands, gently toss the mixture together, making sure it's combined but not compacted.

Place a piece of parchment paper on a sheet pan. Pat the meat into a flat rectangle and then press the sides in until it forms a cylinder down the middle of the pan (this will ensure no air pockets). Bake for 40 to 50 minutes, until a thermometer inserted in the middle reads 155 to 160 degrees. Remove from the oven and allow to rest for 10 minutes. Slice and serve hot with the Garlic Sauce.

For garlic sauce:

Combine the oil and garlic in a small saucepan and bring to a boil. Lower the heat and simmer for 10 to 15 minutes, until lightly browned. Be careful not to burn the garlic or it will be bitter. Remove the garlic from the oil and set aside. (I save the oil for vinaigrettes.)

Combine the chicken stock, butter and cooked garlic in a medium saucepan and bring to a boil. Lower the heat and cook at a full boil for 35 to 40 minutes, until slightly thickened. Mash the garlic with a fork, whisk in 1/4 teaspoon salt and ½ teaspoon pepper, and taste for seasonings. Spoon the warm sauce over the meatloaf.

Choose firm heads of garlic that have no green sprouts.

Serving Size

Makes 6 to 8 servings


Why not hijack the thread with something delish, eh, falak?  Maybe make a great holiday meal?


And by the way, tonight will be my last on ZH for a while.  I am glad to share this recipe with you, though.  :D

I have some matters of family to deal with over the next few months- maybe six or so- but I'll see you on the other side!

Live warm and live happy, falak!  Taste life!  (As I know you always do...)

falak pema's picture

sounds like a great meal to have with red wine or universally adapted bubbly!

Live warm is a nice thought Orly, I intend to put it into practice, nothing like a good sweat, to open the appetite.

As we enter this month of december with its double feast at the end, I have the opportunity to enjoy a family birthday celebration at the beginning; so yes, december is a good month to taste life as we shiver on the outside!

Happy family reunions to you and see you in 2013; if not before, happy new year! 

viva la vida! 

Colonial Intent's picture

But if i'm not richer than other people how will they know i'm superior to them?