We’ll make a little prediction here. This research will be used to insist that the rich do not move over taxes. This is not what the research says, not at all. The research looks at why those who do not move over taxes do not move over taxes. That’s a different point.
The UK’s super-rich “would never leave the country for tax reasons” because they fear they would be “bored to death” in “culturally barren” tax havens, according to new research by experts at the London School of Economics.
No, that’s not what the research itself does say. Rather, they ask a number of such rich folk why or whether they would move. Current tax rates or thereabouts wouldn’t make most of the respondents do so. Corbynite, or 1970s style, would make many more of them do so.
So it’s not whether tax would make them move, it’s how much tax would make them move.
Which leaves us right back where we were before. Yes, if you’re rich then London’s an absolutely fabulous place to live. If you like that culture thing at least. Therefore there are things that anchor to London - as well as the obvious fact that many of those rich, as the report itself says, make their high incomes by being top of London’s pile - which is something we already knew.
Or, as again the report says, tax rates as against everything else in life are one of the factors that go into the residence equation. Change the tax rates and the result spat out at the end of the process will change. And who has ever said different?
It’s also possible to make a slightly different point. Which is that Sir Jim Ratcliffe did move, as the paper admits. Something we’d posit lost more revenue than is gained by these 35 who have, so far, stayed. So, while the number of people moving might be seen as tax rates are not too high tax revenues might well indicate they are too high.
By far the most interesting part of the paper to us was this - for the above is what we all knew before and the only change here is that people will claim the paper says what it doesn’t - about education:
Private schools also played an important role in the decision making of many interviewees.
While Inner London was of less importance here, as private schools do not have catchment
areas, the number and perceived quality of private schools in London and the South East
more generally were often cited in discussions about why people had decided to bring up
families in this part of the UK. Brad, for example, talked about wanting to ‘buy’ his children
‘a very good if not the best education’ and therefore targeted two particular very elite London
private schools. Similarly, Wendy talked about how ease of access to certain private schools
was the overarching reason why she decided to stay in one part of North London for such a
long time.
True, currently the decision is only about VAT and property taxation, but there’s a very strong strand of leftish thinking in Britain that private education should be banned altogether. This paper pointing out that that could have significant effects upon tax revenues - for that private education is one of those anchors which tie these rich to this country so they can be taxed. Abolish that and we’d be lightening the anchor and thus lowering the tax rate that can be charged before they do move.
Which is an interesting result, don’t you think?