How superstar cities tax away top talent
- Bloomberg data: $160B in billionaire wealth fled the UK in two years—over half the nation's total—as tax-man plays Grim Reaper.
- Economists Baldwin & Krugman warned: tax the golden goose too hard, and the whole 'agglomeration' farm collapses—irreversibly so.
- Star scientists vote with their feet: a 1% tax cut lures 1.8% more brainiacs across state lines, per Moretti & Wilson.
- Wall Street's crown is slipping: NYC's securities job share crashed from a third (1990) to under 18% (2024) as growth heads to cheaper pastures.
- California's 2012 rich tax hike didn't just push out millionaires—it cut income from those who stayed. Oops.
Brief Summary
The Manhattan Institute's City Journal waves a bloody Bloomberg report in front of New York and California's faces: Britain just lost $160 billion in billionaire wealth—over half its total, folks—because it taxed them like ATMs with no withdrawal limit. London's 'superstar' status was supposed to be bulletproof, but true believers in the cult of agglomeration forgot the fine print: those network effects are insurance, not a Get Out of Policy Jail Free card. Legacy cities from NYC's shrinking Wall Street share (33% to 17.9%) to California's deluded 2012 tax hike prove that capital can recalibrate faster than a politician's spin cycle. The sting is not loud departures but silent ones: CEOs hiring elsewhere, investors parking cash in Texas, top scientists fleeing to no-income-tax states. Even when the headquarters stay, the *next* job, the *next* dollar—they're gone. That's the real ghost tax: less growth than there could have been, and no red carpet moment to tweet about.
Why This Matters
Your rent, your commute, your kid's future—all tied to whether your state thinks it's too big to fail. If Gavin Newsom or Kathy Hochul read this as a warning shot, you might see tax policy that doesn't treat high earners as walking ATMs. But if they're insulated in their blue bubbles, prepare for the slow bleed: fewer jobs, weaker services, and a shinier exit sign for anyone with options. The scary part is the 'irreversible' bit—once those networks decamp to Austin or Miami, no tax cut will lure them back. You're not just losing billionaires; you're losing the ecosystem that pays for schools, transit, and the pothole fix on your block. Politically, this skewers the progressive fantasy that the rich have nowhere else to go. They do. And they're reading maps, not manifestos. Dear taxpayer: your state's smugness has an expiration date, and it's stamped on the exit visa.