We mentioned the other day in the HOTLINE that Britain’s new Labour government is raising capital gains and death taxes at its own peril. The Brits are conducting a fascinating experiment: how many millionaires can they drive out of the country? At least one British betting shop is discussing offering odds on the number.

The investment firms of Henly & Partners and New World Wealth have issued a report predicting that Labour tax hikes will drive more than 9,500 millionaires to decamp by the end of December. Two-thirds of them are headed for the European Union, with favorite destinations including  Italy, Malta, Portugal, Switzerland, Monaco, France, and the Netherlands. Some 800 are likely to move to Dubai and another 720 to the United States.

One of the most punitive tax measures Labour is enacting is to end special rules that exempted much of the worldwide income of wealthy residents who are not considered permanently settled in Britain.  The Adam Smith Institute estimates that the change will wipe out 23,000 British jobs due to lost investment.

Britain is going to have to relearn a painful lesson it was taught in the 1970s before Margaret Thatcher’s election: capital and wealth flow to where they are treated well. Britain’s new taxes on the rich will simply mean fewer rich people to tax. Duh!!