According to Bloomberg, $160bn-worth of billionaires have quit the UK in the last two years – more than the worth of those who remain. 

‘Tax changes targeting the wealthy since Labour came to office in 2024 are taking a growing toll on London’s status as a global financial powerhouse,’ Bloomberg warned. One billionaire interviewee opined: ‘What’s happening at the moment is disastrous… Instead of being on a virtuous circle where we’re attracting millionaires, billionaires and inward investment — we are doing the reverse.’ ‘The UK seems to misunderstand how we’re very mobile,’ another complained in an interview from her new home in Italy. 

This isn’t the first such warning since Labour came to power, and given how much the right-wing press loves such narratives, it won’t be the last. But should we really care? How much does the presence, or not, of footloose super rich capitalists actually matter? 

Well, on closer reading of the Bloomberg article, perhaps not quite as much as the shouty headlines suggest. For a start, the UK’s position as global hub isn’t that vulnerable, it concedes. Similar scare stories were bandied about after Brexit, but the reality largely failed to follow suit. The list of recent departures are almost all foreigners, ‘many with relatively recent, and sometimes loose, ties to the country’, who bolted for home in the months before then chancellor Rachel Reeves made long-trailed changes to the tax treatment of non-doms  and private-equity carry. And what about the hundreds of Russian oligarchs, initially obsequiously welcomed, who after the Ukraine invasion became personae non gratae and have now vanished without trace, regret or comment?

Moreover, in Bloomberg’s quaint phrase, the UK still ‘punches above its weight’ in the wealth stakes. According to UBS, the UK is home to 2.4m dollar millionaires, the fifth largest country number in the world and second highest in Europe after Germany. This hardly suggests that wealth at a less extreme level is either unwelcome or particularly difficult to to acquire.

In fact, given its current salience, the question of great wealth occupies a remarkably small place in mainstream economics, and the arguments in its favour are simplistic at best. They amount to the fact that the rich pay a lot of tax – some 27 per cent of the take in the UK and US – and therefore we need more of them to boost the total; the assumption that the energetic and unhindered pursuit of wealth assists growth; and that it benefits the less well off through trickle down. That’s about it. Yet the first is true but wilfully misleading in that it applies to taxes on income that add up to a mere quarter of the overall tax take; the link between inequality and growth has never been been proved; and trickle down attracts the scorn of serious economists. 

More effective as a narrative, although equally dubious, has become the assumption of the very rich that their possession of wealth is a sign of the superiority of their intellect and effort and therefore automatically merited, and their lust for making and accumulating ever more money is for that reason sacrosanct. So strong has this purely ideological idea become that talk of taxing the mega-rich has become mega-taboo even for a Labour Party that is currently reclaiming its roots.

Yet prominent economists such as Nobel laureate Paul Krugman, Thomas Picketty, Gabriel Zucman and Emmanuel Saez have come to the conclusion that far from being an asset extreme wealth and the inequality that comes with it have become the opposite: a cancer on the economies in which they occur.

Far from being justified by merit and effort, Piketty and others contend that return on capital tends to grow faster than the economy as a whole (his famous equation  r>g), aided substantially by grossly underrated factors such as inheritance, luck, market power, and asset appreciation. Also suspect is the belief that high inequality is essential to growth – after all, strong postwar growth in the Western economies occurred under top tax rates that would be inconceivable today.

But even if the economic case could be shown to be positive, it would be negated several times over by the toxic politics of wealth. As the US example demonstrates with frightening clarity, extreme wealth is a clear and present threat to democracy. As far right guru Peter Thiel has obligingly admitted, ‘I no longer believe that freedom and democracy are compatible’. Unlike many of his elucubrations, this one we should take seriously.

As billionaire Warren Buffet famously conceded in 2011, something is clearly wrong with a system in which he pays proportionally less tax than his secretary. This is partly because dividends and capital gains are taxed at lower rates than salaries, but also because of the ability of the very rich to borrow against assets instead of selling them to pay for living expenses, so that little taxable income is ever realised, not to mention accounting ruses of ever greater complexity. As Zucman has shown, a substantial chunk of global household financial wealth ends up in tax havens. The overall result is that those with the greatest ability to pay contribute proportionally least.

The US now has nearly 1000 billionaires, many the product of socially dubious financial ‘innovation’ (private equity and credit, hedge funds, cryptography) and the soaring stock markets of the decade and more of zero interest rates after the Great Crash of 2008. Their combined wealth of $8.4tr is equivalent to an extraordinary 27 per cent of American GDP. Yet even this misses the most important part of the story – the yet greater concentration of wealth at the very top of the billionaires pile. That is to say, not the wealthiest 2 or even 1 per cent of the population, but the 0.1 or even the 0.001: the 50 to 100 multibillionaires who are openly deploying their wealth not on useful consumption but to buy political influence through campaign finance, lobbying, media ownership and think tanks with which they can shape the rules to protect what they already have and strengthen their position even further.

In short, the US is becoming an oligarchy, an oligarchy, what’s more, whose members, not content with bending US politics to their own ends, are actively exporting their far-right, hate and division-fuelled algorithms to Britain and Europe.

As I write this, Elon Musk is eyeing up a pay package that could conceivably reach a preposterous $1.7tr as he folds his three companies into a single Ponzi-style bet on himself. At the same time Mark Zuckerberg, as the dominant shareholder of Meta Platforms currently the world’s fifth richest man with a fortune of a mere $228bn, is undertaking a complicated manoeuvre to raise capital to pay a California wealth tax, if it is enacted next month, without diminishing his control over the group. He is also demanding a new pay deal matching that of founders ‘of similar stature’, which can only mean Musk himself. Given the well-known economic concept of diminishing marginal utility, and the fact that he already has thousands of times more money than he and his family could ever need or even count, the only conceivable reason behind such demands are addiction and the brute power to impose his will on others.

So no, we don’t need to worry about the susceptibilities and special pleading of the ultra-wealthy – they can and must be made to pay their fair share to support the social, health and security services from which they benefit like the rest of society – Zucman has proposed a minimum wealth tax of 2 percent on the ultra-wealthy to make them pay a fairer contribution to the overall wealthy. As Krugman concludes, ‘The only sustainable way to keep mega-billionaires from having so much power, so much ability to degrade democracy, is for them not to be so wealthy.’ All other arguments pale into insignificance in comparison.