From Massachusetts, Some Tax-the-Rich Inspiration
by Sam Pizzigati  /  May 28, 2024

“This spring has been an exceedingly good one for Flightline Aviation Limited, a London-based enterprise that specializes in helping the world’s deepest pockets find the private jet of their dreams. “We have closed six sales in the past five weeks,” Flightline’s Anna Campbell gushed at London’s most celebrated luxury trade fair earlier this month. “Everyone seems to want to get a plane for summer.” Polly Toynbee, a veteran British political columnist, happened to be at that same trade fair. She watched one gentleman talking with a salesman about a showcased private plane and then approached that potential buyer with a question. With so many families struggling to put food on the table, Toynbee asked, shouldn’t the UK’s richest be paying “a bit more” in taxes? “Why would I?” the private-jet aficionado replied. “Look,” he added, waving at the aircraft on sale all around him, “take any more in tax and the wealthy would be off — away out of here in one of these!”

Off to a place, that gentleman of means was implying, smart enough not to inconvenience its richest residents with any sort of robust tax on income or wealth. The rich who call the UK home have, at the moment, little reason to start looking for one of those tax-getaway locales. Britain’s Labour Party, the likely winner in the nation’s next parliamentary elections, is showing no interest whatsoever in subjecting the UK’s richest to any significant tax hike. “We have no plans for a wealth tax,” Rachel Reeves, the Labour Party’s likely choice for finance minister, announced last summer — and no plans either to put in place a mansion tax or a higher levy on either capital gains or top tax-bracket income. “I don’t see the way to prosperity as being through taxation,” Reeves went on. “I want to grow the economy.”

The British economy is already growing quite nicely — for the UK’s wealthiest. Since 1989, the University of Greenwich economist Ben Tipper points out, the nation’s 200 richest residents have seen their wealth — after taking inflation into account — grow on average by 15 percent per year. Throughout human history, adds the UK High Pay Centre’s Luke Hildyard, living standards for average households have only improved when societies have in place mechanisms “to ensure that wealth doesn’t overwhelmingly flow to the people with all the economic and political power.” Given that reality, Hildyard posits in his just-published Enough: Why it’s Time to Abolish the Super Rich, modern societies need to both tax the top 1 percent “more effectively” and get those wealthy to pay more “to the workers at the companies they run and invest in.” How best to accomplish all that? Progressives in the United States — the only UK peer nation with less of a tax burden on its richest — have plenty of ideas on that score. This past week we learned that one of those ideas is generating some encouraging results.

The back story: In 2022, after seven years of dedicated volunteer labor, the Raise Up Massachusetts coalition of over 150 community organizations, faith-based groups, and labor unions had worked onto the November statewide ballot a constitutional amendment to add what amounted to a special tax on millionaires to the state constitution. This “Fair Share Amendment” called for adding a 4 percent state tax on annual income over $1 million to the state’s existing 5 percent flat-rate income tax. That $1 million threshold, the amendment also spelled out, would adjust annually to reflect cost-of-living increases. The proceeds from this special new levy on wealthy taxpayers would all go for public education and maintaining and improving the state’s public transit, roads, and bridges. Voters turned out to like that notion. The Fair Share Amendment passed comfortably, with over 52 percent of the vote, and went into effect last year. “The message sailed past billionaire money to victory,” as Jacobin contributing editor Paul Prescod has noted, “because it was clear, compelling, and broad-based: make the rich pay so we have more revenue to improve the lives of working people.”

How much of a difference has the new Massachusetts levy on millionaires so far made? The Boston Globe earlier this week headlined the surprising answer: “‘Millionaires tax’ has already generated $1.8 billion this year for Massachusetts, blowing past projections.” Way past projections. With three months still left in the state fiscal year, the new Massachusetts millionaires tax has already generated $1.8 billion in added new revenue, some $800 million more than state officials had projected the tax would raise in their budget for the entire fiscal year. “Opponents of the Fair Share Amendment,” exulted Raise Up Massachusetts spokesperson Andrew Farnitano, “claimed that multi-millionaires would flee Massachusetts rather than pay the new tax, and they are being proven wrong every day.” That doesn’t surprise Omar Ocampo, a Massachusetts-based analyst with the Institute for Policy Studies. Research from other states, he notes, demonstrates that instances of “millionaires fleeing increased taxes” turn out to be “extremely rare.”

Before the Fair Share Amendment’s passage, wealthy Massachusetts taxpayers averaging $2.4 million in annual income were only paying 6.8 percent of that income in state and local taxes, a rate less than the 8.9 percent of their incomes that taxpayers in the state’s bottom 99 percent were paying. The new Fair Share Amendment, estimates the Institute on Taxation and Economic Policy’s Marco Guzman, will raise the combined Massachusetts state and local tax rate on the state’s richest, but only to 8.7 percent. In other words, advocates for tax justice in Massachusetts — like advocates for greater equality across the United States and all around the world — still have plenty of victories that need winning. But let’s make sure that we celebrate each victory along the way!”

New York City Reigns as the World’s Hub for Millionaires
by Liz Lucking  /  May 10, 2024

“More millionaires call New York City home than anywhere else in the world, according to a report from international wealth migration specialists Henley & Partners. The Big Apple, which has seen its high-net-worth population jump by 48% over the past decade, is home to 349,500 millionaires, 744 centi-millionaires—those with liquid investable wealth of over US$100 million—and 60 billionaires, according to the firm, which collaborated with data intelligence firm New World Wealth for the analysis.

The city also ranked as the top spot for millionaires last year. California’s Bay Area, encompassing San Francisco and the tech-mecca of Silicon Valley, ranked second. Wealth in the Bay Area has grown at one of the fastest rates in the world, increasing its number of wealthy citizens by a sizable 82% over the past decade. It’s now home to 305,700 millionaires, 675 centi-millionaires, and 68 billionaires. New York and the Bay Area were among 11 areas in the U.S. on the top 50 ranking, making the country the world’s foremost hub of moneyed residents. 

Henley & Partners

Across the pond, London, which ranked as the wealthiest city in the world for many years, tumbled down the ranking, and now sits in fifth place with just 227,000 millionaires, 370 centi-millionaires, and 35 billionaires, a decline of 10% over the past decade, said the report, which was released earlier this week. Cities with the fastest growing wealth, meanwhile, can be found in China. Shenzhen’s wealthy population is snowballing most, with their numbers surging by 140% in the last 10 years, the report said. “Hangzhou has also experienced a massive 125% increase in its [high-net-worth] residents, and Guangzhou’s millionaires have grown by 110% over the past decade,” said Andrew Amoils, head of research at New World Wealth, in the report.

Looking ahead, when it comes to wealth growth potential over the next decade, “cities to watch include Bengaluru, India; Scottsdale, Arizona; and Ho Chi Minh City in Vietnam,” he added. “All three have enjoyed exceptional growth rates of over 100% in their resident millionaire populations over the past 10 years.” Underpinning the growth of the world’s wealthiest cities has been the robust performance of financial markets of late, from the S&P 500 to Bitcoin, according to Juerg Steffen, CEO of Henley & Partners.  Plus, “rapid advancements in artificial intelligence, robotics, and blockchain technology have provided new opportunities for wealth creation and accumulation,” Steffen said. “Yet, even as new opportunities emerge, old risks persist. The war in Ukraine, which has seen Moscow’s millionaire population plummet by 24% to 30,300, is a stark reminder of the fragility of wealth in an uncertain and unstable world.”

One Out of Every 24 New York City Residents Is Now a Millionaire
by  and   /  May 7, 2024

“For all the talk of a big-money exodus from New York, the city’s residents still have more wealth — in excess of $3 trillion — than those of any other metro in the world. New York has almost 350,000 millionaires, which is the most of any city and up 48% from a decade ago, according to a global ranking of the wealthiest cities by Henley & Partners, an immigration consultancy. That means about one in every 24 of its 8.26 million residents has a seven-figure net worth, compared with about one in 36 in 2013. New York still has a large share of the ultra-rich, too: the report found that it has 60 billionaires and 744 people with investable wealth of more than $100 million. The findings illustrate the scope of New York’s wealth at a time when some of the city’s richest people are fretting a power shift to Florida as the finance industry sets up a Wall Street South.

“New York Tops List of Cities With Most Millionaires”

Miami ranked 33rd among the cities with the most millionaires, up 78% over the past 10 years. The Bay Area came in second overall, with 305,700 people with a seven-figure net worth living in the region that includes San Jose, San Francisco and Palo Alto. Tokyo came in third with 298,300, a figure that slid 5% over the past decade. Singapore, No. 4, has become a top destination for migrating millionaires with about 3,400 high net-worth individuals moving there in 2023 alone. The boom in financial markets in the past few years has driven growth in the world’s richest cities, according to Juerg Steffen, Henley & Partners’ chief executive officer. Global equities surged 20% in 2023 and are up almost 7% this year.

“New York City residents have more than $3 trillion of combined wealth”

However, some global cities have seen their fortunes reverse. London lost 10% of its millionaire population in the past decade, which included the UK’s decision to exit the European Union. Hong Kong saw a 4% decline in its millionaire ranks as wealthy expats left for Singapore following China’s pandemic-era crackdown. Some cities on the rise include China’s Shenzhen, where the number of millionaires has surged 140% over the past decade. Bengaluru, India; Ho Chi Minh City, Vietnam; and Scottsdale, Arizona in the US, have also seen their millionaire population more than double in the past 10 years.  Dubai is the richest city in the Middle East, ranking No. 21 globally. Based on wealth per capita, Monaco ranks No. 1 in the world, with more than 40% of its residents being millionaires. New York City comes second.”