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Taxation and Migration by the Super-Rich

Author

Listed:
  • Advani, Arun

    (University of Warwick, CAGE, the Institute for Fiscal Studies (IFS), and the LSE International Inequalities Institute (III))

  • Burgherr, David

    (LSE III.)

  • Summers, Andy

    (London School of Economics, III, and CAGE)

Abstract

Using administrative data on the globally connected super-rich in the UK, we study the effect of a large tax reform on migration behaviour. Prior to 2017, o shore investment returns for `non-doms' - individuals tax resident in the UK but with connections to other countries - were untaxed. Average off shore investment returns for these individuals exceeded £420,000; even without considering other types of income, this puts them in the top 0.2% of the population. A reform in 2017 brought long-stayers and UK-born non-doms into the standard tax system, reducing their effective net of average tax rate by between 8.8% and 13.0%. We nd that migration responses were limited : our central estimate of the migration elasticity is 0.02, and across a range of specifications we can rule out elasticities larger than 0.5. Using reforms for the UK-born super-rich who were living abroad, we find that migration elasticities are limited even for recent arrivals, for whom our central estimate is 0.18. Assuming similar elasticities for all non-doms, abolition of the preferential regime would increase tax revenue collected from non-doms by £3.2bn (84%).

Suggested Citation

  • Advani, Arun & Burgherr, David & Summers, Andy, "undated". "Taxation and Migration by the Super-Rich," CAGE Online Working Paper Series 630, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:630
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp630.2022.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    taxation; migration; capital income; inequality; mobility JEL Codes: F22 ; H31 ; J61;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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