The UK closed a tax loophole. Guess what. NYC can expect the same.
Extreme Wealthy Flee the UK
The Wall Street Journal reports The U.K. Closed a Tax Loophole for the Global Rich. Now They’re Fleeing.
The U.K. is trying to tax the superrich. It’s off to a bumpy start.
“I’m on my way out,” said Bassim Haidar, a Nigerian-born Lebanese businessman who moved here in 2010. “There comes a time when you don’t feel welcome anymore, and it’s time to just start packing and leaving.”
Haidar is one of the estimated 74,000 who used a centuries-old tax loophole, abolished in April, that catered to the global rich. The nondomiciled—or non-dom status, as it is known—allowed foreigners living in the U.K. to pay tax only on what they earned domestically. Profits made abroad were ignored unless brought into the U.K.
Beset by high public debt and crumbling infrastructure, the U.K. hoped eliminating non-doms would bring in about $45 billion by 2030. But instead of paying up, wealthy expats are rushing for the exits, sparking questions about whether the effort will raise any money at all.
The British experiment has laid bare the difficult politics of taxing the rich. Taxing high earners has become a rallying cry on the left as a solution to income inequality and fraying social-safety nets. Low-tax advocates say taxes on the wealthy are counterproductive, driving away job creators and big spenders.
One challenge of taxing the wealthy is that they are highly mobile, with houses around the world, private jets and an army of advisers who can sort out visas and bureaucratic paperwork quickly. Jurisdictions such as Dubai, Italy and Monaco have rolled out the red carpet, offering no taxation or structures similar to the U.K.’s old non-dom status.
Haidar is selling his U.K. properties and plans to leave this summer. He’ll split his time between Dubai and Greece.
Wealthy Britons have been trying to escape the U.K.’s high tax rates for decades. In the 1970s, the Rolling Stones moved to France to avoid taxes, while David Bowie went to Switzerland.
The lucrative non-dom loophole had the opposite effect, drawing rich foreigners to London.
The U.K. always knew that some rich residents would leave because of the tax changes and built that into its forecasts. The U.K.’s independent budget watchdog, the Office for Budget Responsibility, estimated that among a large subset of non-doms, around 12% will move. But it warned this month that departures could be higher and said the U.K.’s “growing reliance on this small and mobile group of taxpayers therefore represents a fiscal risk.”
A report from the Centre for Economics and Business Research, commissioned by the Land of Opportunity campaign, forecast that a higher share of non-doms would leave and suggested the government could lose money if the migration rate tops 25%.
Campaign Platform of Democrat Zohran Mamdani
In New York City, here is the campaign platform of Democrat Zohran Mamdani
- Freeze rent
- Create affordable, union-built, rent-stabilized homes – constructing 200,000 new units over the next 10 years.
- Create a network of city-owned grocery stores
- Free bus transportation
- Free childcare for every New Yorker aged 6 weeks to 5 years, ensuring high quality programming for all families.
- Wages for childcare workers to be at parity with public school teachers.
- New York City will renovate 500 public schools with renewable energy infrastructure and HVAC upgrades, transform 500 asphalt schoolyards into vibrant green spaces, create 15,000 union jobs, and build resilience hubs in 50 schools that provide resources and safe spaces during emergencies.
- The Mamdani administration will protect LGBTQIA+ New Yorkers by expanding and protecting gender-affirming care citywide, making NYC an LGBTQIA+ sanctuary city, and creating the Office of LGBTQIA+ Affairs. He’ll make NYC an LGBTQIA+ sanctuary city and protect reproductive rights.
- As Mayor, Zohran will reject Medicare Advantage, and reject higher copays for inservice workers.
- As Mayor, Zohran will champion a new local law bringing the NYC wage floor up to $30/hour by 2030.
How Will Zohran Pay for the Above?
- Zohran’s revenue plan will raise the corporate tax rate to match New Jersey’s 11.5%, bringing in $5 billion
- He will tax the wealthiest 1% of New Yorkers—those earning above $1 million annually—a flat 2% tax (right now city income tax rates are essentially the same whether you make $50,000 or $50 million).
Prisons Are Obsolete
Abolition of Private Property
Gender Affirming Care
Defund the Police
Mamdani now says he does not support defunding the police.
Wait a Second
He now does not want to “defund” the police. He just wants yo cut $1 billion out of a $6 billion budget.
A Pathetic List of Candidates
The New York Times addresses the question Who’s Running for Mayor of New York City?
- Zohran Mamdani is a state assemblyman and democratic socialist who stunned the political establishment with his victory in the Democratic primary.
- Curtis Sliwa, a Republican, lost the general election to Mr. Adams in 2021. He is running for the Republican nomination again.
- Eric Adams ran for mayor in 2021 as a former police officer who vowed to bring down crime, and his message four years later is similar. But he faces many challenges. He was indicted on federal corruption charges that were later dismissed by the Trump administration; his administration has been plagued by investigations and high-profile resignations; his approval rating is at record lows.
- Andrew Cuomo was elected to three terms as governor and resigned in 2021 after roughly a dozen women accused him of sexual harassment. He also faced criticism for his handling of nursing home deaths during the pandemic.
- Jim Walden, a former federal prosecutor who has handled high-profile cases, is running as an independent.
What a pathetic lot.
Sliwa, a Republican, has no chance and he won’t back out. That’s likely irrelevant.
However, three candidates running as independents is relevant. If they all stay in, they will split the vote ending what little chance they did have.
It’s even worse than I thought looking at the Platform of Jim Walden
To tackle affordability, he’s pledged $1 billion a year in rent relief for the city’s most rent-burdened tenants, funded immediately by cutting ineffective programs and using the city’s budget surplus, and in the future, by instituting a 0.75% “micro-tax” on goods and services, which he said would raise an estimated $60 billion over four years. Walden said the tax is small enough that it won’t cause companies to alter their business decisions. He would need state approval for the tax.
He also wants to create a contract-based rent-stabilization program to incentive more affordable housing.
Pretty Much Over
Mish Proposal
Given that anyone would be better than Zohran Mamdani, I suggest Andrew Cuomo, Eric Adams, and Jim Walden agree to pulling a single name out of the hat to run as the independent.
Otherwise, and perhaps anyway, a Marxist will be running New York City.
mamdani, like Biden, is preying on the dim and mentally challenged but highly educated. It’s not right and someone has to stand up for the highly educated but morbidly dim new yawkers.
Or not and we can all enjoy the show with a fresh bucket of popcorn.
crunch, crunch, crunch!
I SOOOO hope they elect him. I have my popcorn ready to watch New York crash and burn like LA, the rest of the West Coast cities and Chicago.
Once Cities and States go woke and blue they are seemingly trapped in a cycle of electing destructive people and then either reelecting them or electing somsone even worse. There doesn’t seem to be a way to break the cycle short of complete and utter collapse.
Hitting rock bottom is how some addicts discover they have a problem. No different here.
The beauty of America is that we have so many levels of government. The democrats are intent on destroying thier cities and states to provide examples as to why the incompetent to govern (playing right into trumps hands). When detroit is the shining example above the wasteland that NY is to becomedo you really think they could win a race for national dog catcher?
The top rate of UK income tax peaked at 83% in 1975 and 98% for investment income.
Let them. I have no use for rich people. I hear they’re tasty, but I don’t care for pork.
If negative results can be hidden for a short while, that’s your next Brand D presidential option.
C’mon Mish.Give Mandami some credit. He is identifying some real problems (granted there may be some problems with his solutions).He is not attacking all captitalism: He is attacking rentier capitalism. One compromise solution:Tax the hell out of people (including corporations) who own more than one home. But as a tradeoff: No taxes to move the capital to gold or bitcoin. The reason: You hurt nobody by becoming rich off of gold or bitcoin, but you are inviting the guillotine by buying up all the housing and forcing people into serfdom. Create a wealth-protecting system while driving “investors” (leaches!) out of “investments” that people need to live. Long live private property, but tax the hell out of the rentier vampire squids!
“identifying some real problems”
Standing on a sidewalk with a sign is the easy part.
Call me if he fixes something.
Charlie Kirk pointed this out as well. Money is so broken then young people are not able to afford what we see as basics: purchasing a home, building credit, affording middle class things. Hence his appeal. Fix the money (and many other things) and there’s no incentive for dissatisfied people to give him the time of day.
kindly name 3 of mamdani’s most noteworthy business accomplishments.
If the rich leave NY, who buys their property? The rich.
Zohran Mamdani on abolishing prisons and jail: “What purpose do they serve, besides making people feel good?”
The Soros DA’s in San Francisco and L.A. got thrown out of office for their soft on criminals policy.
Get ready for Mayor Bloomberg redux………..Have to admit he was a dam good mayor , I thought anyway
Why do the rich think people are going to mourn their departure? Good riddance.
Did towns mourn when local factories packed up and moved to China? Yesterday, saw a video of an interview with the head of In-N-Out Burgers, who is moving their headquarters from Irvine California to Tennessee, explaining that CA is not friendly to business or families. It’s not just the CEO who is leaving, it’s the headquarters jobs and tax base those jobs and corporate operations provided.
is he loading all the stores up on to his truck to take away too?
seems like a good deal for everyone then. Other jurisdictions get the tax money, New York keeps the welfare cases and criminals. Everyone gets what they want!
Hooray!
Tax the poor.
Tariff the poor.
Enslave the poor.
The poor don’t pay any income taxes. Everyone pays the tariffs. We are all slaves to the state. Keep whining.
Seems that both NYC and the UK have failed to learn the lessons of ‘The Communist Manifesto’, or failed to actually put those in practice. One of them is that when the rich flee, the communists strip that rich person of all 100% of their assets, without compensation.
(Some totalitarian states go further, such as top South Vietnamese officials had to be ransomed out of re-education camps (slave labor camps) and out of the country by their relatives who had earlier escaped. Ditto Adolf Hitler imprisoned a member of the Rothschild banking family and his relatives elsewhere in Europe had to ransom him.)
Speaking of wealth, it is valued (roughly) in USD, but it is usually in another form such as factories, and is not as mobile as the rich owners themselves. The rich know this and have long since been making their new investments in nicer places, like Texas. Things can get so bad that the rich owners are willing to abandon factories in states like California and New York. Look at how many = n entities have owned an auto factory located in Fremont CA. N-1 of those entities have abandoned the factory.
I think a slave labor camp in USA would not be profitable – pay rate for a decent slave driver would turn it into a cost center.
Where are they going to go? Hickville, KY? Deliverance, WV? Dustbowl, OK?
Miami Fl or Austin TX?
Miami is sinking into the ocean and Austin ain’t what it used to be!
ew, and ew
Moosedick Alaska is very pretty this time of year.
The odd thing is that there are more people earning over a million dollars per year in NY than most would ever think. And, they are not all going to run and hide to avoid an incremental tax increase.
Those that are so tax sensitive, have already run to Florida only to find insurance, condo fees and real estate taxes eating their free lunch…
Now, if you want to talk about the city becoming unsafe for locals and tourists? That is a different story.
Singapore is jonesing to become the financial center of the world…
>
“Singapore is jonesing to become the financial center of the world”…
And doing an exceptional job.
Yes they are.
Singapore is a young, dynamic city in the heart of the worlds industrial, trading routes and population growth. World class infrastructure and a highly educated population create many opportunities for a growing financial class that can consolidate trade/banking activities.
The banking system is aligned with the US now, but It is a highly mobile enterprise. When the US finally tips over under the weight of its debt, the banking giants will quickly move their alliance to a new jurisdiction and declare a new global “Reserve” currency.
I do not see this happening in the near future, but trading volumes for commodities are growing every year!
Banks have no national alliance in the long run. They are allied to money and its flow.
The leftists want to Tax The Rich. On a global basis anyone earning more than USD 33,000 is a 1%. So I hope NYC jacks up the taxes on everyone who is a 1 percenter. It’s what they deserve for electing socialists .
“anyone earning more than USD 33,000 is a 1%”
Made up or a real stat? I have not looked in a long time.
“AI Overview
To be considered part of the global 1%, an individual typically needs an annual income of at least $172,000 USD.”
Awwww, made up.
Depends on the source, there is no way 172k is it. The US is the richest with less than 1/30th of the global pop of 8bil. 400k is top 1% in the us. 33k is way more plausible than 172k. $172k sounds like the top 1% of the industrialized world. AI is not God, I have found that it is terrible when it doesn’t have a source and needs to think. THINK FOR YOURSELVES PEOPLE!
I’ve read a number of articles and still don’t see where 33k and 172k stack up as guesses. Some, eg UN’s world inequality database report, are so political I think they made stuff up because the author knew nobody could get trustworthy data to refute them. What’s a good thought experiment to estimate? Supposedly there are thousands of global billionaires, maybe I could use fit them on the high side of a normal plot.THen I’d be assuming:
My interrrum conclusion is “oh well, guess I don’t get to know.”
There is a mistake in the discussion. Mamdani does not want to tax NYC residents with income of a million or more at 2%. He wants to increase the existing city income tax of 3.9% to 5.9% for residents with income of a million or more.
also, he says nice words and the dim really like that.
Wonder where we would be if tax rates were still the same before regan lowered them.
You mean before the FED inflated the currency by about 300%?
Recall the story of David Tepper moving away from (fleeing) New Jersey and it left a huge hole in their budget. AI results showed it was in 2016 and it cost them $140 million annually. Sounds like he had to return for familial reasons but the Tepper Effect is real. Imagine these municipalities being dependent on lofty tax collections thinking that they are perpetually entitled but can only hope folks hang around to be taxed!
I believe the saying is capital goes where capital is treated best.
I think the action will happen “at the margin” so there’d be not much to report so specifically. Somehow, some income would escape the categorization “NYC income”.
You had me at “New York”.
Mish everyone is fleeing already because nobody can afford the town. And how is closing a tax loophole bad? Sounds to me like Cuomo, Adams, and friends failed, got fired, and are coping over a socialist candidate being popular.
As for the rich fleeing: Where to? We sure as hell don’t want them down south, and if they think the west coast is going to appreciate more clueless billionaires they have another thing coming. They did this to themselves by stealing their way out of being accepted, and for all I care they can climb in a box and get shipped off to wherever third world country they offshored the nation’s once proud industry away to. Holiday in Cambodia anyone?
People are not “fleeing New York”. The NYC housing market is soaring, even as prices roll over hard in many other metro areas.
If people were fleeing New York housing prices wouldn’t be an election issue.
Or was your comment more in line with Yogi Berra’s “Nobody goes there anymore, it’s too crowded”?
NYC population is down 300,000 in the last decade. Prices are not soaring, rents are barely keeping up with inflation, and in many neighborhoods, real estate prices are unchanged for the past decade – Upper West Side and Upper East side in Manhattan are two examples.
The New York Metropolitan area population is stable. (Wikipedia, U.S. Census data.)
NYC’s population is up 300K over last 15 years. (Wikipedia.).
You’re entitled to facts but not cherry-picking
And even if you were right, a drop of 300K out of 8.5 million over 10 years isn’t “fleeing”.
Again, if people were truly “fleeing” (“get me out no matter what!”) then housing supply would exceed demand and prices would be falling. Instead they are rising in NYC overall, even as other cities show falling prices.
Save “fleeing” for places like Gaza or Ukraine.
Just to keep us on topic, this blogpost is about potential tax policy changes by Mayoral candidate Mambani.
These tax changes would occur in the FUTURE, under many “if this…” assumptions. So the wealthy fleeing NYC would then theoretically occur in the FUTURE, not in the past 15 years.
That’s what the discussion is about – comparing that FUTURE theoretical situation to what happened in the past in the UK.
I was merely refuting Creamer’s claim that mass flight is already happening.
To return to my Yogi Berra theme, “It’s difficult to make predictions, especially about the future.”
Personally I don’t think Mamdani will be elected.
I do think the populists will succeed in forcing some more concessions from the plutocratic Establishment, but they won’t be idiotic Marxist ones.
“I do think the populists will succeed in forcing some more concessions from the plutocratic Establishment, but they won’t be idiotic Marxist ones.”
ha ha, have a look at LA. What can happen probably will. Or look at Portland. That’s another city circling the drain.
that is from a click of a google search………. now it is highly possible the mass wave of illegal immigrants in 2024 will turn this around when 2024 census is counted. But all these illegals are doing is draining the already thin government aid programs and they pay almost zero tax
Estimates are meaningless.
This is the Internet. We are not here to find meaning.
People are absolutely fleeing New York. Go look at population stats and stop trying to create indirect non-arguments for a directly measurable phenomenon. Population trends are crystal clear.
I can’t rec this more…. Oh, the stupid wealthy will flee? They one eat so many meal a day, so many cars, so many homes. Where they live only increases the costs for everyone else.
Stop worshiping the truly wealthy.
(not at all saying this commie dude in NY has any validity at all)
Actually, what tax loophole is being closed? You are entitled to your opinion, but not entitled to make up facts.
Said in reference to the UK tax loophole closing. Call me old fashioned, but I don’t think a nation enforcing fair laws is a bad thing.
Florida, hell even CT
Good luck with that. The state is going underwater more by the year, I’m glad I got out when the getting was good.
A lot of people that live in New York will flee due to crime. They want to open government run grocery stores. That will be a joke. Residents will steal all the food as they won’t be caught and/or prosecuted as they plan to defund the police.
Being rich is not a right, we will all become equal as we enter the Chinese century.
Leo Tolstoy wrote a story “How much land does a man need?” Land in 19th century Russia still equated to wealth. Take a glance at the end of the story.
I understand Ukraine was handily adjacent and had USSR history plus some Russian speakers… but Jamaica e.g. seems like such a nicer option.
But it certainly is your right to work hard, take risks, get off your ass and try to become rich.
– The UK closed a tax loophole. Guess what. NYC can expect the same. > I highly doubt that. Sure, at the moment they are stuck with RE, and other “NY Investments” but if that happens NY would be toast eventually. Investment of any financial sort is gone, as in Poof!! Much would be (much already is) hidden someplace untouchable and untraceable. We’re talking the Super Wealthy here!! Federal Money is or has started to dry up, so what’s left? $0.00 is what…
– “I’m on my way out,” > Best never to hear that in NY!! It can’t bounce back from that right now, as it would bury them…
– Beset by high public debt and crumbling infrastructure, the U.K. hoped eliminating non-doms would bring in about $45 billion by 2030. But instead of paying up, wealthy expats are rushing for the exits, sparking questions about whether the effort will raise any money at all. > What Idiot is Surprised by this? Unless handcuffed to the State, they’re GONE! It’s why their Rich!!
– Campaign Platform of Democrat Zohran Mamdani:
In New York City, here is the campaign platform of Democrat Zohran Mamdani: > Blah, Blah, Blah… Like it could pass. If it did, chaos would erupt. NY Can’t Print, but the UK Can!
– How Will Zohran Pay for the Above?
> He won’t, and can’t and that’s game, set and match. Game Over…
If you try to tax rich owners, and the owner’s assets are RE, then the taxes flow through to poor(er) renters. It’s difficult to categorize someone in a place where homeless people have cell plans as poor.
Wealth is getting a lot more mobile now, and if anything, that is being eased here by the Trump administration.
The states are also competing to attract it. Notice the corporate exodus (small so far, I mean, considering Tesla’s size) from Delaware to Texas. And a path has been blazed for residences moving from NY to FL.
It is the golden age of global wealth- and regulatory- arbitrage! No doubt AI expedites it all.
“Wealth is getting a lot more mobile now, and if anything, that is being eased here by the Trump administration.
The states are also competing to attract it.”
Washington state just passed a stack of new taxes, including on the rich. They are not competing to attract the rich.
Yeah but the weather… uh…. Oh no.
It at least should be clarified that the Mayor of New York City can PROPOSE any tax increase(s) he/she wants. It is the State Legislature/Governor who has to vote and approve. So the panic about Mamdani is a bit over blown. NYC does have its own income tax (approved by Albany) assuming you both live and work in the City. On top of the City tax is a State income tax as well. The State of NY income tax is higher than the City tax and the state needs the money too. As an aside, if you live in NJ but work in NYC, your income tax goes to Albany. After the borough of Manhattan, the largest contributor to the State of NY’s treasury is New Jersey residents. I can’t see how NJ can work with this set up. The bottom line is that the State of NY knows the tax math and anything that feeds the exodus of income tax revenue is taken very seriously. But I digress. See below:
I would also like to clarify that we have a somewhat distorted metric related to “movement” out of NYC. Is there an outbound migration out of NYC by the wealthy? Yes there is, especially to non-income tax states like Florida, Texas etc. But the definition of “move” is a bit more complicated because there is both full movement and partial movement. Most move data for “full movement” is captured by tax records, voting registration and DMV registration. All of these show a steady “move” out of NYC to places like Florida (but also Pennsylvania which has an income tax, but a much lower one than NY/NYC). What is interesting, however, is that if you spend some time in S. Florida in the wealthy enclaves between Palm Beach and Miami, as an example, especially in the Summer months, the place is a ghost town. Where is everyone? Well, they are slumming it for no more than 180 days back at their homes in NY, NYC, NJ, Connecticut that they most definitely did not sell. But for tax/legal domicile purposes, they have “moved” to the sunny confine of income tax free Florida. There are also property tax benefits for making Florida your legal domicile even if you have another home out side of Florida. It’s a legal tax-loop hole and it also over-states the movement out of the Northeast especially since the numbers suggest that the movement is only partial to escape the long arm of high personal income taxes. So it’s a bit more complicated and this semi-migration has been in full bloom long before the current NYC mayoral cycle. Just sayin’
The UK has a real problem. The Florida for high net worth Londoners is Dubai, Abu Dhabi, Singapore, Hong Kong, and Malta. Saudi Arabia increasingly wants in on the spoils and this will likely develop over time. The global elite and rich are indeed a mobile lot. It’s the middle and upper middle that will be left with the tax bills coupled with decaying public infrastructure and high costs.
Kind of proves Mamdani’s point though. The ultra wealthy legitimately believe they’re allowed to be above the law while everyone else foots the bill. That’s essentially an aristocracy with extra steps, and it shouldn’t be accepted by anyone.
Before anyone whines: I’m a capitalist. I believe in the rewards of hard work. Being a multi billionaire is not the rewards of hard work, it’s a sign of rampant corruption. A multi millionaire business genius or author or whatever is being rewarded for his work, a guy worth more than an entire country’s GDP is not.
I’m dead tired of any criticism of America’s increasingly feudalistic look being painted as professing stalinism head on. Especially not when rampant corruption has increasingly morphed the US into a sad parody of the USSR circa 1987.
Someone please explain the difference between communism where every company is a state owned monopoly and “capitalism” where every company is a monopoly where the board members hold political offices.
Calling all billionaires corrupt isn’t right.
If you are someone who starts a company and issues stock you have no control over what that stock prices does. It goes up/down based on demand and perceived value. Just because the ‘market’ bids it up enough that you become a billionaire or multi-billionaire doesn’t mean you are corrupt or made that money corruptly or that it’s a sign of corruption.
I’m a day late to this convo but I’m curious if you can name a single billionaire who amassed that wealth and maintained it honestly. I can’t think of one.
Question requires definition of how honest one must be to be called honest. Gates, Ellison and Bezos e.g. might or might not be more honest than me e.g. and I would not know. All I’d know is they’re richer.
I agree but it gets murky when I ask… what about that successful entrepreneur’s offspring, then the offspring’s offspring for the next N generations? The heads of top ten richest US families eventually die. What then?
The tax issue you point out regarding Albany are valid,,,
I have never been a city dweller as the crowds simply do not appeal. I do like to go to NY every few years for perhaps three days for a few Broadway shows or shopping for art or antiques. The crumbling infrastructure of our older cities gives me pause and the entire east coast and gulf coast are simply too hot and threatened by hurricanes for me.
Lots of the wealthy from the north simply own inexpensive interior property and register their cars there for tax purposes. Then rent a nice condo on the beach for a few months during the winter or also own in the Virgin Islands.
As a former resident of Florida I can say:
If it Flies, Floats, or is in Florida ~~~ Rent it!
I read once that New York employed a woman specifically to keep tabs on Rush Limbaugh and count the number of days he spent in state and make sure he paid his taxes. Eventually Rush moved permanently to Florida, without a look back, and he took his staff with him to Florida. So New York was out the income taxes, etc., from all those people, and this woman had to get a new job.
there was an old movie about escaping from New York.
Kurt Russell…………I was on a date………It didn’t go well lol
“Snake Plisken? I heard of you. I heard you was DEAD!”