Economist Art Laffer Tells Britain Its Tax Rates Are Driving Away High Earners and Wealth

Art Laffer has a message for Britain: cut taxes or keep losing your wealthiest people.

Laffer, the American economist who advised Ronald Reagan and Margaret Thatcher and now advises President Donald Trump, told The Times that the United Kingdom's tax burden is driving high earners abroad and suppressing growth that could otherwise make the country "rich and prosperous."

"Britain should be great again and it's all taxes and regulations that have been just killing you," Laffer said, according to The Times. "It's so sad because you have the potential to be rich and prosperous and just at the same time. And you're missing these opportunities."

Laffer's specific recommendations, as reported by The Times, include cutting the UK's top income tax rate from 45 percent to 35 percent on earnings above £125,000 (about $170,000). He argues this would draw back wealthy expatriates who have already left the country.

"You would welcome back all your wealthy expats that left," Laffer said. "You've lost all these wonderful people, I mean, we have tons of Brits."

Beyond the top rate cut, Laffer wants Britain to eventually move toward a flat tax system with no deductions, exemptions, or credits. "I would make [flat tax] statistically revenue neutral with no deductions, no exemptions, no exclusions, no write-offs, no omissions, no credits, none of that garbage," he said. His reasoning: complicated tax codes create demand for "lawyers, accountants, deferred income specialists, favour grabbers, lobbyists" whose only job is helping people navigate the mess.

Laffer reserved his harshest criticism for Britain's inheritance tax, which he called "the most immoral tax I've ever seen." He argues death taxes discourage people from working harder to build wealth for their families. "I don't want a new car and new stuff. I love my children and I love giving them money," Laffer said. "But if you have a death tax like that, you stop all of us from being productive and working in the labour force and making [young people's] lives better."

He also flagged the UK's stamp duty, a tax on property transactions, as another economic drag. Because it's charged every time someone buys a home, Laffer argues it discourages people from moving for better jobs or opportunities, effectively trapping labor in place.

Laffer built his reputation on the idea that bears his name: the Laffer Curve, which holds that tax revenue rises with tax rates only up to a point, after which higher rates actually reduce government revenue because people work less, hide income, or leave. It became a foundational argument for supply-side tax cuts under Reagan in the 1980s.

Whether Britain has crossed that threshold is a genuinely disputed question among economists, not a settled fact. Laffer's critics have long argued that the curve, while theoretically sound, gets used to justify tax cuts at income levels far below where the curve's downside actually kicks in, and that empirical estimates of where the UK sits on that curve vary widely depending on which economist you ask.

There is real data suggesting wealthy Britons have been leaving. Reports of high-net-worth individuals relocating out of the UK, often citing changes to Britain's tax treatment of foreign income and non-domiciled residents, have been a recurring theme in UK financial press over the past two years. Whether Laffer's specific prescription, a 10-point cut to the top income tax rate plus abolishing inheritance tax and stamp duty, would reverse that trend or simply reduce government revenue without drawing people back is unproven either way.

The inheritance tax argument in particular cuts against a different set of concerns. Critics of abolishing death taxes, including some center-left economists, argue that eliminating them concentrates wealth across generations and reduces incentives for large estates to be taxed at all, shifting more of the tax burden onto wages and consumption instead. This represents a genuine trade-off that Laffer's comments do not address.

What happens next depends on decisions by British tax policymakers, who have not announced any changes along the lines Laffer proposed. Any move to cut the top income tax rate, abolish inheritance tax, or scrap stamp duty would require action from HM Treasury and would face scrutiny over its impact on a UK budget already under pressure from debt servicing costs and public spending demands.