The Laffer Curve continues to shed light on how to manage tax policy more effectively. Unfortunately, too few recognize the pragmatech theory that posits a too high tax burden will alter individual behavior. As taxes rise, especially on the affluent, who may relocate easily, this drives tax revenue away as individuals adjust and some vote with their feet.
A prime example emerged today as it was revealed that Nik Storonsky, CEO and co-founder of one of the most successful Fintechs in the UK, digital bank Revolut, has changed his domicile to the United Arab Emirates (UAE).
First reported in Forbes, which highlighted that another billionaire has fled the UK due to excessive taxes, the story uncovered that Storonsky changed his country of residence to the UAE, as indicated in a Companies House filing for his family office. The actual date of the change occurred in October of 2024, according to a document filed this week.
The UK has experienced an exodus of affluent individuals due to the Labour government’s pursuit of increasing taxes.
The Henley Private Wealth Migration Report predicted that approximately 16,500 millionaires would flee the UK in 2025, surpassing China by more than 2X.
What should come as no surprise, at the top of the list of countries where the affluent are relocating to are the UAE, followed by the US.
In the UAE, individuals do not pay an income tax. Corporations are taxed at a rate of 15% for large multinational enterprises, with smaller firms paying 9% or nothing at all.
Storonsky’s holdings of Revolut shares are valued at around $7.9 billion.
As the wealthy pay a disproportionate percentage of tax revenue in the UK, this does not bode well for the future of public services.
The wealthiest 1% are said to be responsible for 63% of Capital Gains Tax, 50% of Inheritance Tax, and 48% of Stamp Duty taxes. It appears that some of this revenue will be vaporized by the Labour government, but by the time policymakers recognize it, it will likely be too late.