What happens when you stop taxing billionaires?
Money & Macro · 2026-07-03 · 20 min
https://www.youtube.com/watch?v=Y9LOOvJ7hKwVideo summary
Swedish and Danish evidence suggests a 2% UK billionaire wealth tax could raise far less than £7.8 billion after avoidance and business losses.
Billionaires often pay lower effective tax rates than middle-class households, but wealth taxes face a familiar objection: the rich may leave and take jobs with them. Using Swedish and Danish records, researchers find that a 1-percentage-point increase in the top wealth tax reduces wealthy taxpayers by about 2%; Sweden’s 2% tax did not trigger a mass exodus. Applied to a UK proposal taxing wealth above £1 billion, the tax might initially raise £7.8 billion annually, while departures alone would have limited economy-wide effects. The larger problem is avoidance: owners can shift assets into private companies that are difficult to value. Including emigration and portfolio rearrangement, the analysis estimates only 24 pence may remain for each pound theoretically due, bringing the UK estimate closer to £2.4 billion. Wealth taxes are no miracle fix, the video concludes; fairer taxation likely requires coordinated income, capital-gains, exit, and inheritance taxes.
Chapters
- 0:00Intro: Swedish-Danish study tests whether taxing billionaires drives them away
- 2:33The tax billionaires hate most: annual wealth taxes reach unsold assets
- 6:21How many actually leave? About 4% under a proposed UK 2% billionaire tax
- 10:49What happens to the economy? Departing owners’ firms lose jobs and investment
- 12:21The real weakness of wealth taxes: undervalued private firms enable avoidance
- 15:40Conclusion: A smarter way to tax the rich combines taxes and cross-border coordination
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