The Trump migration is prompting the wealthy to move
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Trumpism is causing Americans to start moving out of red states and even America itself.
Why it matters: The wealthy tend to have the greatest ability to move, which means that such outmigration can have a disproportionate effect on state and local taxes.
The big picture: The pandemic caused a generational change in the ability and willingness of many high-income professionals to move.
- Having done it once, or seen their peers do it, they're more likely to act upon similar impulses this time around.
- Some folks are moving in response to Donald Trump's election. Others are fleeing red states with abortion bans. (More on that below.)
Flashback: From 2020 to 2021, large U.S. urban areas lost more than $68 billion in taxable income, per the Economic Innovation Group, with Manhattan alone accounting for more than $16 billion of that sum.
- That $16 billion in taxable income was spread across 37,000 returns, which means the average departing Manhattan household had taxable income of more than $425,000.
Where it stands: "A lot of the movement that we're now seeing of Americans moving to the U.K. would be people who who don't want to live in Trump's America," says David Lesperance, a lawyer who deals with ultra high net worth families.
- London in particular is attractive because of its language, schools, cultural institutions, and general safety, he says.
- Anecdotally, there has been a spike not only in Americans applying for U.K. passports — which they can only do if they've already lived in the U.K. for at least five years — but also in Americans buying houses in the U.K. and newly applying for leave to stay, which is what they do if they want to move to the U.K. from the U.S.
- Knight Frank, a U.K. real estate consultancy, told a U.K. industry trade publication that "many super-rich Americans are buying up London properties to escape Trump."
Zoom in: Lesperance was retained by seven families in just nine days after Trump signed his executive order targeting trans youth receiving gender-affirming care.
- "People who feel in danger tend to seek me out," he says. That includes families who want to ensure uninterrupted medical care for their children.
Zoom out: The desire to move is much stronger than it was in 2017, according to Lesperance, who says he has seen a ninefold increase in interest compared to the first Trump administration.
- Not only did the pandemic radically change perceptions of how difficult it is to do so, it also created a whole new market in "digital nomad" visas and other ways for people to live and work abroad.
- The fear of how far Trump is willing to go has also risen significantly since January 6, 2021, and since the spate of executive orders he has signed so far this term.
Head north: The U.K. immigration system works faster than Canada's, where there's something of a backlog. Nevertheless, Vance Langford, a president of the Canadian Immigration Lawyers Association, told the Financial Post that he now gets about five calls a week from Americans looking to move their businesses to Canada, up from roughly one per week.
Between the lines: Many Americans who fear being targeted by Trump are urgently seeking other passports, Lesperance says. While it's extraordinarily difficult for the U.S. government to strip an American of citizenship, it's very easy for the Secretary of State to cancel a passport.
- Without a valid passport, it's effectively impossible for an American to leave the country or to obtain a foreign work permit or residence.
The bottom line: The very rich are used to taking precautionary measures. Nowadays, those measures increasingly involve foreign residence or even citizenship.
