https://www.wsj.com/opinion/britain-versus-the-laffer-curve-523ed588?mod=trending_now_opn_2
Britain Versus the Laffer Curve
High tax rates push more Britons overseas—and revenue down.
ET
The Laffer Curve comes for us all in the end, and man is it attacking the United Kingdom with a vengeance now. The latest immigration data suggest Britons are voting with their feet against rising taxes.
Migration figures for 2025, released Thursday by the Office for National Statistics, showed the lowest net immigration since Covid, at 171,000. Prime Minister Keir Starmer’s Labour Party is eager to trumpet a rapid decline in new arrivals, given how contentious immigration policy has become.
But an equally important part of the story is increasing net emigration by Britons. While the number of people leaving has held steady at some 250,000 annually in recent years, the number of people who repatriate each year is declining noticeably. This is down to 110,000 in the most recent year, from as much as 170,000 annually in the wake of the pandemic.
The stereotypical British émigré used to be the retiree packing up for sunnier climes in Spain or France. These days it’s the younger worker who moves to Dubai for lower taxes and then delays returning to Britain. These are some of Britain’s most entrepreneurial people, and they’re spending their prime tax-paying years out of the country.
They’re in good company. The annual “rich list” of Britain’s wealthiest, published last week by the Sunday Times of London (owned by the same company as the Journal), found a race for the exits. One-sixth of the people on the list two years ago have dropped off, and 111 of the British citizens on the 350-name list live offshore.
Only one foreign billionaire moved to Britain: Warren Stephens, the U.S. ambassador. As a diplomat, he’s exempt from British taxation.
Undeterred, Labour Party politicians keep promising to tax the rich more. The latest is Wes Streeting, former health secretary vying to replace Mr. Starmer as party leader and Prime Minister. Mr. Streeting this week proposed a new “wealth tax” in the form of a higher tax rate on capital gains to match the rate on personal income. That’s as high as 45% for anyone earning over £125,140. He seems to think this would be a revenue raiser.
The migration data show it isn’t. Don’t compare today’s tax revenue to some fanciful future when entrepreneurial young Britons and the wealthy take higher rates on the chin. Instead, compare today’s revenue to what the treasury will take in from people who leave: zero. Arthur Laffer tried to warn them.
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