It started in the comments section of a TikTok about free school lunches. Someone typed, “Name one time rich people actually moved to avoid taxes.” So I did. I rattled off examples like I’d been waiting for that prompt all year: Facebook co-founder Eduardo Saverin leaving the United States for Singapore before the IPO; whole zip codes of Californians decamping to Austin and Miami; French actor Gérard Depardieu running to Belgium and then Russia when Paris hiked its top bracket. That short exchange reminded me how many people still believe wealth is fixed in place, as if a rich person’s ZIP code is a civic promise rather than a choice renewed each year at tax time.
I’ve watched the same blindness unfold again this fall with the election of Zohran Mamdani in New York City. He’s an earnest idealist, talking about rent freezes, public housing, and a new moral contract for the city. I understand the impulse; I want people cared for too. But the headlines that followed—stories of bidding wars in Westchester, sudden spikes in Greenwich listings, and panicked calls to Jersey realtors—told a quieter truth. When a city challenges the comfort of its upper middle and upper classes, those people don’t riot or negotiate. They move.
I’ve seen it before. I grew up when New York was literally bankrupt in the 1970s—brownouts, graffiti, the smell of steam and urine, the whole Scorsese palette. The city was alive but broke. When my family left for Hawaii in 1976, the adults didn’t talk about crime or art; they talked about taxes. A generation later, the same tension is back. But this time, the frogs know they’re in a pan, and the water heats faster.
Money used to be heavy. It sat in vaults and factories, bound to geography. In the 1940s through the 1970s, America and Western Europe could impose 80- and 90-percent marginal rates because capital was trapped by paperwork and infrastructure. Rockefeller couldn’t move Standard Oil to Singapore overnight. A French banker in 1955 needed an entire cargo ship to hide francs. But deregulation, fiber-optic cables, and container ships dissolved that world. Today, money is vapor; you can move it across borders before breakfast.
That’s why every time a mayor or governor vows to “make the rich pay,” I already know how the story ends. Wealth and government play chicken; wealth always wins. The city blinks first, because it can’t risk the exodus. Then come the concessions: new tax credits, “innovation corridors,” opportunity zones, anything to coax the frogs back into the pot. The rich return on better terms, and the cycle resets.
I don’t even mean billionaires. I’m talking about dual-income professionals—the $300- or $400-thousand-a-year crowd who fill the tax rolls. They’re the invisible scaffolding of every blue-state budget. They don’t own yachts, but they fund public transit and schools through payroll and property taxes. When they get uneasy, the ledger shakes. They don’t need to move to Florida; they only have to cross a river. Look at D.C.: two-thirds of its workforce lives in Maryland or Virginia. Because there’s no commuter tax, the city subsidizes the suburbs that drain it. That’s the future waiting for any metropolis that mistakes wealth for an immovable asset.
I say this as someone who still believes in public care. America already runs a kind of shadow socialism; no one dies untreated in an ER, no one starves without calories. The safety net exists, patched together by bureaucracy and charity. But maintaining it depends on the people who fund it feeling that they’re participants, not hostages. Charity is opt-in. Tax support is opt-out. The moment giving feels coerced, the givers stop living there.
I live in Arlington, Virginia—one of the most expensive zip codes in the country—and I’m here mostly because I fell in love with the place. I’m grandfathered in at a rent I can justify, but if the math changed, I’d leave. No protest, no slogans, just arithmetic. Everyone has that line. When cities forget it, they lose people like me first. Most folks don’t fight the market; they exit it.
Yet every city has its true believers, the people who treat their neighborhood like sacred ground. They’re the saints of the urban church, declaring, “This is my city, I’ll never leave.” I respect them. But they’re exceptions. Most residents aren’t martyrs—they’re pragmatic. They don’t chain themselves to overpriced leases or nostalgia; they find a cooler pan. That’s what politicians miss: love of place is emotion, not revenue.
I remember when Brooklyn was the iceberg nobody wanted. In 1993, the idea of living there was laughable. Sex and the City made it a punchline—crossing the bridge was exile. But because it was undesirable, it was cheap, and the people who took that chance turned it into gold. Every borough, every city, follows the same pattern: yesterday’s frontier becomes tomorrow’s luxury. Geography doesn’t change; perception does.
What has changed is the physics of capital. Forget ideology. When you threaten the comfort of the people who fund a city, they don’t argue—they vanish. The “princess-and-the-pea class,” as I call them, are exquisitely sensitive. The smallest policy tremor—a wealth-tax rumor, a rent-control proposal—raises the temperature. If it climbs too fast, they jump. A state can’t guilt-trip a balance sheet. You can’t tax resentment.
That’s what makes modern taxation the inverse of its old self. It’s not coercion; it’s courtship. Cities used to demand tribute; now they host beauty contests. Arlington won the Amazon HQ2 pageant by offering tax breaks and infrastructure perks like a dowry. Dozens of competitors threw themselves at Bezos’s feet. The logic was simple: prestige and secondary income. Get the rich, and the gentrification follows. Get the stadium, and the condos will bloom around it.
That’s why cities chase sports teams, the Olympics, anything that looks like prosperity in motion. They want the redevelopment without admitting they want the displacement. Public works become respectable excuses to bulldoze blight. Every mayor knows you can’t run on “we’re demolishing low-income housing,” but you can run on “revitalization.” Freeways, arenas, and waterfront districts are just polite ways to say we want nicer neighbors.
I watched it happen here. Nationals Park rose from what used to be one of D.C.’s most dangerous neighborhoods. Everyone called it a billionaire’s subsidy. Within a decade the same blocks were lined with tier-one restaurants, boutique hotels, and defense contractors’ offices. The Verizon Center did the same for Chinatown. When I went to the 9:30 Club in the late ’80s, you could park anywhere because no one else dared. Now it’s all theaters and tech firms. That’s why mayors keep repeating the ritual: prestige begets investment, investment begets gentrification, gentrification raises the tax base. Urban alchemy disguised as culture.
The older I get, the more obvious it feels that the contest for money isn’t ideological; it’s gravitational. Cities orbit wealth now, not the other way around. The winners aren’t the ones with the loftiest platforms but the ones with the best amenities, the least friction, and the quickest commute to an airport. Every public-private partnership, every “innovation corridor,” every tax-increment district is really a coded invitation that says, please stay; please build here; we’ll make it worth your while.
You can see how far the pendulum has swung by remembering when taxation still functioned as discipline. From the 1940s through the 1970s, the United States and Western Europe could run top marginal rates above seventy, even ninety percent, because capital had mass. Factories, docks, and payrolls pinned it down. If you owned a steel mill or an auto plant, you couldn’t spirit it to Singapore. Governments could safely skim because wealth had nowhere to hide. Then came deregulation, computers, and instantaneous transfers. The shackles snapped. Since the early eighties, the highest brackets have fallen by half while fortunes multiplied tenfold, and the money moves through a web of shells, trusts, and subsidiaries that barely touch the ground. Cities still talk about “capturing value,” but the value has learned to levitate.
That’s why I keep using the frog-in-the-pan image. The rich aren’t villains; they’re thermometers. Warm the water slowly—modest fees, a sense of civic pride—and they’ll stay. Turn up the heat with moral lectures and punitive taxes, and they leap. Every modern exodus begins with a temperature mistake. The rhetoric of “eat the rich” might thrill a rally, but it raises the boil. Once comfort curdles into contempt, the frogs hop to cooler ponds: Connecticut, Texas, the Emirates, wherever the tone feels welcoming again.
It wasn’t always this adversarial. For most of the twentieth century, rich Americans were part of the civic religion. Their names were on libraries and symphony halls; their foundations kept museums alive. We admired wealth even as we taxed it because we saw philanthropy as noblesse oblige. Rockefeller, Carnegie, Ford—their fortunes were moralized as public gifts. Now we’ve moralized them as crimes. When politicians parade slogans about killing billionaires, they may win applause, but they lose endowments. A donor who feels despised rarely writes another check. And when the private checks dry up, the public ones get smaller too.
That’s what people forget: taxation is psychological. It relies on voluntary compliance and emotional legitimacy. You can’t legislate gratitude. You have to woo it. The same way artists must woo patrons, cities must woo taxpayers. That isn’t cynicism; it’s the cost of running civilization on consent rather than coercion. I’m not arguing that we abandon social care—only that we fund it with eyes open. America already practices a kind of pragmatic socialism. No one truly starves; emergency rooms treat everyone; shelters exist. But none of it functions without the goodwill of the productive class that still believes in staying put. Lose that trust, and the safety net frays faster than ideology can patch it.
Reputation is the last tether that keeps professionals bound to place. A lawyer with “New York” on the résumé can walk into Honolulu or Boise and be greeted like a prize import. I saw it in Hawaii—how every new arrival from a tier-one city got fast-tracked because prestige travels better than luggage. That portability means even the so-called grounded professions—doctors, attorneys, consultants—can relocate without losing much. Licenses can be reissued, clients can Zoom, credibility migrates intact. Once reputation becomes a transferable asset, geography loses its leverage.
Even brick-and-mortar businesses have learned the trick. They can incorporate in Delaware, bank in Nevada, and route profits through whichever state offers the friendliest terms. The storefront may sit downtown, but the earnings live elsewhere. The map still looks local, yet the money isn’t. That hollowing out leaves municipalities chasing shadows: taxing the coffee shop but not the holding company, paving roads for people whose income is booked in another jurisdiction.
So we arrive at the modern paradox. Every city wants gentrification without saying the word. They crave the tax base and the polish but can’t admit they need displacement to get it. Public works become the fig leaf: stadiums, Olympic bids, redevelopment corridors—acceptable reasons to raze the crumbling blocks no one dares describe honestly. I watched it unfold in Washington when Nationals Park rose on the Southeast waterfront. Everyone denounced it as corporate welfare; now the same ground hosts Michelin-starred restaurants, luxury apartments, and the headquarters of half the Beltway consultancies. The Verizon Center did the same for Chinatown. The playbook never changes because it works. Call it infrastructure, and you can bulldoze the past in the name of progress.
The longer you watch these cycles, the clearer the hierarchy becomes. Governments no longer tax the rich; they audition for them. States don’t hold power; they lease it. The moment a city threatens its contributors, it panics, apologizes, and offers sweeter terms. It’s the same dynamic as the stadium deal: threaten to move the team, and you’ll get a new arena. Threaten to move your wealth, and you’ll get a new tax credit. Capital has become the only true constituency.
And yet I can’t bring myself to hate that truth. It’s simply physics. Money follows the gradient of comfort, and policy either acknowledges that or dies fighting it. I’m old enough to remember when the scent of steam and pretzels covered the smell of decay in mid-seventies Manhattan. The city I loved was magnificent and bankrupt at once. We survived then because people still felt tied to place. That tie is gone. Affection is no longer an anchor; it’s nostalgia. We live in an era of portable money, portable reputation, portable loyalty. The only citizens who truly belong anywhere are the ones too proud or too poor to leave.
Everywhere else, the water keeps heating. Some frogs stay out of habit, others because they like the view. But they all know, somewhere deep down, that the pan has handles and that they can hop whenever they choose. That knowledge alone has changed everything.
It’s not the nineteenth century anymore. The steam is still rising from the streets, but the power that once drove it has already left the city.
For Readers Who Want the Full Picture
If you’ve made it this far, you already know this isn’t a rant about “the rich” or a love letter to them either. It’s a reality check about how money, cities, and mobility actually work.
A lot of people online talk about taxation and inequality in moral terms — who deserves what, who’s “hoarding,” who’s “paying their fair share.” That’s fine for Twitter, but cities don’t balance their budgets on vibes. The truth is more structural than sinister: capital moves faster than governments do.
So for anyone who wants to go a little deeper — the history, the mechanics, the politics, the definitions — I’ve added this next section as a kind of field guide. Think of it as “Capital Flight 101” for readers who want to understand how we got here, what it means, and why no amount of good intentions can repeal gravity.
Historical Context
For most of the twentieth century, governments could tax wealth aggressively because wealth was anchored.
Factories, mines, and corporate headquarters were fixed assets. When a state levied a 70–90% top marginal rate, the rich complained but stayed. There were currency controls, limited mobility, and social norms that made tax avoidance seem unpatriotic. The postwar economic order — Bretton Woods, the Marshall Plan, the rise of industrial unions — assumed that money and labor both belonged to a nation.
The collapse of that arrangement began in the 1970s.
Oil shocks, inflation, deregulation, and the end of the gold standard broke the postwar compact. The Reagan-Thatcher era of the 1980s turned mobility into virtue. Taxes fell, borders opened, and multinational corporations were legally encouraged to base profits wherever taxes were lowest. Once capital became software instead of steel, taxation became negotiation.
Political Context
What’s happening in cities like New York under Mayor Zohran Mamdani is part of a broader pattern. Progressive politics has reemerged in wealthy democracies just as the ability to tax wealth has evaporated.
Politicians still talk as though governments can dictate terms to capital, but in practice, modern states compete for it. Tax codes have become marketing tools; economic development offices are sales teams.
Right-wing populism and left-wing socialism both feed off the same anxiety: the sense that governments have lost control over their economic destiny.
When conservatives talk about deregulation or liberals talk about “making the rich pay,” they’re reacting to the same structural reality — the old levers don’t work anymore. What used to be a tug-of-war between labor and capital has become a race between jurisdictions. The only true ideology left is retention.
Capital Flight Context
Capital flight isn’t just a metaphor; it’s measurable.
In economics, it means the rapid movement of wealth from one jurisdiction to another to escape higher taxes, regulation, or political instability. It can take the form of:
individuals changing residency or citizenship,
corporations re-domiciling subsidiaries,
investors shifting portfolios offshore, or
the quiet migration of talent that takes productivity (and tax revenue) with it.
Examples:
France, 2012–2017: A short-lived 75% “super tax” on millionaires led thousands of high earners to relocate, mostly to Belgium and the UK.
California, 2020–2024: Roughly 300,000 high-income earners moved to states with no income tax — Texas, Florida, Nevada — costing California over $20 billion in annual taxable income.
Russia, 2022 onward: After sanctions, oligarch wealth relocated en masse to Dubai, Singapore, and the Caribbean.
UK, 1970s: Pre-Thatcher flight of musicians and entrepreneurs to Monaco and the U.S. after income tax peaked near 98% on investments.
The lesson is consistent: capital doesn’t argue; it leaves. And when it does, the tax base follows.
Timeline
1944–1970s:
Top marginal tax rates in the U.S. and Europe average 70–90%. Industrial capital and labor remain locally fixed. The social contract between governments and corporations is stable.
1971:
U.S. ends gold standard; currencies begin to float. Mobility of capital accelerates.
1980s:
Reagan and Thatcher liberalize markets; top tax rates drop by half. “Supply-side” economics reframes wealth creation as national virtue. Capital flight from high-tax nations begins in earnest.
1990s:
Globalization, free trade, and early internet make capital fully mobile. Tax havens like the Cayman Islands, Luxembourg, and Singapore flourish.
2000s:
The service and tech economy replaces manufacturing. Governments pivot from taxing production to courting it. HQs become trophies.
2010s–2020s:
Populism surges as inequality rises. Progressive taxation returns to political rhetoric but not to reality. Cities increasingly rely on incentives, not mandates, to keep the wealthy in place.
Glossary
Capital Flight:
The movement of assets, wealth, or talent from one jurisdiction to another to avoid taxes, regulation, or instability.
Marginal Tax Rate:
The percentage of tax applied to the last dollar earned. High marginal rates on top incomes used to reach 90%.
Non-Domiciled (Non-Dom):
A legal residency status (especially in the UK) that allows individuals to live in a country without paying local taxes on overseas income.
Tax Haven:
A jurisdiction offering low or no taxes, financial secrecy, and easy incorporation—e.g., Monaco, BVI, Cayman Islands, Singapore.
Gentrification:
The process by which investment and redevelopment raise neighborhood property values, often displacing existing residents.
Fiscal Base (Tax Base):
The total pool of income, property, and business activity subject to taxation.
Exit Tax:
A levy on unrealized capital gains imposed when an individual or company relocates abroad to deter capital flight.
FAQ
Why can’t we just make the rich stay and pay?
Because legal residence, corporate domicile, and income sourcing can all be changed faster than tax law can adapt. The threat to leave is itself leverage.
Isn’t this just greed?
Partly, yes. But it’s also structural. Modern wealth isn’t physical—it’s code, stock options, intellectual property. You can’t wall it in without walling in everyone.
Don’t governments try to stop this?
They do—through global reporting agreements, minimum corporate tax treaties, and exit taxes—but enforcement is weak and competition between countries undermines cooperation.
Does capital flight really hurt regular people?
Yes. When the tax base erodes, cities cut services or raise taxes on those who can’t leave—teachers, nurses, small landlords, renters. The burden shifts downward.
So is socialism impossible now?
Not impossible—just constrained. Generosity must be voluntary or cleverly incentivized. Cities must make prosperity feel safe, not punished.
Are there successful examples of balance?
Nordic countries come closest: moderate corporate taxes, high transparency, social trust, and visible returns on taxation. They don’t demonize wealth; they domesticate it.
tl;dr
The single source argues that the portability of modern wealth has fundamentally shifted the power dynamic between the affluent and local governments. Historically, capital was geographically fixed, allowing governments to impose high marginal tax rates, but today, wealth and high-earning professionals can easily relocate in response to perceived threats like high taxes or aggressive rhetoric. The text uses examples of wealthy individuals and professionals moving out of high-tax jurisdictions like New York City, demonstrating that when a city attempts to “make the rich pay,” the wealthy often choose to exit the tax base rather than negotiate or riot. Consequently, the author asserts that modern taxation is less about coercion and more about “courtship,” with cities competing for wealth through tax incentives and infrastructure projects that appeal to the sensitive upper-middle and upper classes. This competitive dynamic means that cities now orbit wealth, forced to prioritize comfort and low friction to prevent a destabilizing exodus of the vital tax-paying population.
