We're taught that "capital flight" is the real fear of raising tax on rich people but I was recently told that so long as you've got a closed currency border (as in, here in Australia we're the only ones who use Australian dollars) that if a billionaire were to send all of their money overseas, what they have to do first is send the money to a bank in exchange for the foreign currency and ultimately the money doesn't go that far, it just ends up in the bank and it's not a big problem for the economy. Do you see truth to that claim? What do you think of capital flight overall? I use the old top marginal tax rate of 92% in the US as a debating point a lot of the time but I feel like I could use more ammo on this.
is capital flight worth being concerned about?
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