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Friday, June 21st, 2013

Do Higher Taxes Drive Out the Rich?

Author:     ROBERT FRANK
Source:     The Wall Street Journal
Publication Date:     April 16, 2012, 3:36 PM
 Link: Do Higher Taxes Drive Out the Rich?
Stephan:   One of the central arguments of conservatives, virtually an article of faith, is that higher taxes drive out the rich. They believe and say over and over that if their taxes are raised it will make rich people, and the companies they control, move out of the country. Now, let's look at some actual data. Quickly it becomes apparent this argument is specious. Indeed, it is not just without substance, it is perniciously wrong. Note that this report was published in the leading conservative newspaper.

Today’s wealth headline out of London seems tailor-made for the anti-tax crowd.

Agence France-Presse/Getty Images

According to a new study from Lloyds TSB, nearly one in five affluent Britons plan to leave the country in the next two years. That’s up from 14% a year ago. The study measured those with around $400,000 in investible assets.

Conservatives point out this sudden flight comes on the back of the 50% tax rate that was imposed on top earners during the recession. That hike was widely blamed for U.K. wealth flight and for not raising nearly as much revenue as expected.

But a closer look at the study provides a different picture. The top reason that the study group (it’s a stretch to call them ‘wealthy

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