---
title: "The Great Tax Divergence: 26 US States Race Toward Zero Income Tax, Europe Builds Exit Walls — Who Actually Moves"
description: "Republican states have written a path to zero income tax into law, Democratic states are hunting millionaires, and Europe is playing the same game between countries. Official data shows something unexpected — there is no mass flight of the rich, but a narrow mobile tail really does move, and it is the one that hurts budgets most."
author: "Дністер"
published: 2026-08-22T03:01:27.000Z
language: en
url: https://neurodrift.org/en/blog/velyka-podatkova-dyverhentsiya/
tags: ["taxes", "capital migration", "USA", "Europe", "fiscal policy", "tax residency"]
---
# The Great Tax Divergence: 26 US States Race Toward Zero Income Tax, Europe Builds Exit Walls — Who Actually Moves
In March 2026, Washington State governor Bob Ferguson signed two laws in a single week that point in opposite directions. The first [rolled back the previous year's estate-tax increase](https://washingtonstatestandard.com/2026/03/24/ferguson-signs-law-to-undo-wa-estate-tax-increase-enacted-last-year/): the 35% rate, the highest in the country, went back to 20% because the legislature feared wealthy families would flee. The second [introduced the first income tax in the state's history](https://washingtonstatestandard.com/2026/03/30/income-tax-signed-in-washington-with-a-legal-challenge-close-behind/): 9.9% on incomes above one million dollars. A state that had lived for ninety years without any income tax at all managed, within seven days, both to retreat before the rich and to declare open season on them.
This is not one legislature's schizophrenia. It is a compressed portrait of a process The Economist, in its August piece [“America's income taxes are diverging”](https://politicalwire.com/2026/08/06/americas-income-taxes-are-diverging/), called historically new: [26 states have cut their income-tax rates over the past five years](https://taxfoundation.org/data/all/state/state-income-tax-rates-2026/), nearly all of them Republican; Democratic states are moving the other way. Both parties used to keep rates within one corridor. The corridor is gone — there are two camps pulling apart, with millions of taxpayers in between.
The same game is being played between the countries of Europe and between continents — with the difference that there, borders, languages and ever-higher exit walls stand between jurisdictions. Below is a breakdown of all three levels on official data. Fair warning: the most interesting part of this story is not who moved where. It is how many fewer people moved than the headlines promised — and who, exactly, earns money from your belief in the “mass flight of millionaires.”
## The red half: the race to zero
In 2021, [six states had a flat income tax. In 2026 — fifteen](https://taxfoundation.org/data/all/state/flat-tax-state-income-tax-reform/): over five years the club added Arizona (2.5% — the lowest flat rate in the country), Iowa, Georgia, Idaho, Kentucky, Louisiana, Mississippi, North Carolina, and, from 2026, Ohio at 2.75%. On 1 January 2026, [nine states cut rates simultaneously](https://www.cbsnews.com/news/nine-states-cutting-income-taxes-2026/). Nine states levy no tax on wages at all; Mississippi [officially aims to become the tenth](https://governorreeves.ms.gov/gov-reeves-signs-historic-legislation-eliminating-mississippis-individual-income-tax/).
The mechanics are similar everywhere: not a one-off cut but “triggers” — the rate automatically steps down when budget revenues clear a threshold. It sounds like fiscal discipline. Practice differs. Kentucky [softened its own trigger formula twice in two years](https://www.wkyufm.org/news/2024-08-22/kentucky-hits-budget-triggers-for-income-tax-rate-cut-in-2026) so the descent to 3.5% would not stall — rewriting the rules of the game mid-game. Mississippi passed its flagship law [with a typo in the decimal points of the triggers](https://mississippitoday.org/2025/03/20/oops-senate-sent-house-an-income-tax-bill-with-typos-house-went-with-it-whats-next/): the Senate sent the House a text that accidentally accelerated the path to zero, the House knowingly voted for the defective version, and the governor signed it, promising to “fix it later.” Abolition will cost the budget about $2.2 billion a year — roughly a third of the state's tax revenue; a higher fuel excise and hoped-for growth cover half of that on paper.
The most telling case is Kansas. In 2012–2017 the state already ran the “Brownback experiment”: sharp tax cuts with no safeguards whatsoever. The outcome is well documented: [job growth at half the national rate](https://www.cbpp.org/research/kansas-provides-compelling-evidence-of-failure-of-supply-side-tax-cuts), budget holes, a credit downgrade — and in 2017 the Republican supermajority itself repealed its own reform. Eight years later, in 2025, [the same legislature overrode the governor's veto](https://kansasreflector.com/2025/04/10/kansas-legislature-votes-to-reject-governors-veto-of-bill-tied-to-possible-income-tax-cuts/) and set off down the same road again — this time with triggers. Political memory of the failure did not stop the repeat bet; it merely added a safety rope.
Missouri, meanwhile, shows how forecasts miss today. In July 2025 the state became the first in the country to [fully exempt individuals' capital gains from tax](https://dor.mo.gov/news/newsitem/uuid/15044650-59dd-48f4-975a-01988d485255). The official cost estimate was about $111 million a year. The actual figure, [half a year in](https://missouriindependent.com/2025/12/18/missouri-faces-budget-crunch-as-capital-gains-tax-cut-hits-harder-than-expected/), is around $500 million, with a projected general-revenue shortfall of up to $1 billion from fiscal 2027. The forecast missed by a factor of four to five — the state auditor is already publicly advising to “start braking” on spending.
The bill is not split evenly. By ITEP's calculations, nationwide [the bottom 20% of taxpayers hand state and local governments 11.4% of their income while the top 1% pay 7.2%](https://itep.org/tax-systems-in-44-states-exacerbate-inequality-in-depth-who-pays-study-finds/): the tax systems of 44 states already amplify inequality, and swapping income taxes for sales taxes amplifies it further. Even in South Carolina, which wrote a path to a 1.99% rate into law, [23% of taxpayers will initially see an increase](https://itep.org/south-carolina-h4216-eliminate-state-income-tax/) because of how federal deductions are replaced.
## The blue half: hunting millionaires
On the other side of the map runs the counter-movement — and its showcase stands in Massachusetts. In 2023 a 4% surtax on incomes above $1 million took effect there. Skeptics promised wealth flight and a revenue miss. The opposite happened: [$2.2 billion in year one, $2.99 billion in year two](https://www.wbur.org/news/2026/07/22/massachusetts-wealthier-households-revenue-rich-taxes) and [$3.38 billion in year three](https://www.mass.gov/news/fiscal-year-2026-revenue-collections-totaled-45542-billion) — each time well above forecast, with the money constitutionally earmarked for education and transit. But the showcase has a back wall: per IRS data, in 2023 — the tax's first year — [the state lost $4.2 billion of adjusted gross income to out-migration](https://www.investmentnews.com/regulation-legal-compliance/massachusetts-saw-42b-income-outflow-after-millionaire-surtax-took-effect/265787), with 70% of the outflow coming from filers earning over $200k. Supporters reasonably object: the outflow trend began with the pandemic, and [the number of resident millionaires by net worth grew 39%](https://www.boston.com/news/local-news/2025/04/28/report-number-of-millionaires-in-mass-has-actually-gone-up-since-new-tax-took-effect/) after the tax came in. Both facts are true at once — they simply measure different things, and the final score of this experiment will only be visible in the 2024–2025 IRS data, due no earlier than 2027.
New York performs a different genre — restraining its own radicals. New York City's new mayor Zohran Mamdani arrived with a plan to raise the city rate on millionaires by 2 percentage points; governor Kathy Hochul replied publicly: [“I don't want to lose any more people to Palm Beach”](https://qns.com/2026/04/millionaire-tax-mamdani-nyc/) — and the plan died in Albany. The compromise was [the state's first-ever pied-à-terre tax](https://www.hklaw.com/en/insights/publications/2026/06/new-york-state-enacts-pied-a-terre-tax): from July 2026, an annual 4–6.5% levy on luxury “second homes” worth over $1 million owned by non-residents. The logic is flawlessly cynical: tax those who don't vote in the state. Hochul's caution has an arithmetic base: income tax provides [up to 69% of the state budget's revenue](https://spectrumlocalnews.com/nys/central-ny/politics/2025/01/21/hochul-s--252b-budget-extends-millionaire-tax--poses-school-cell-phone-ban), and nearly half of it is paid by millionaires — a base you tamper with at your peril.
California, meanwhile, is preparing the most radical test: in November 2026 the state votes on [Proposition 40](https://ballotpedia.org/California_One-Time_Wealth_Tax_for_State-Funded_Health_Care_Programs_Initiative_(2026)) — a one-time 5% tax on fortunes above $1.1 billion, retroactive to everyone who was a resident on 1 January 2026 (so nobody escapes in time). The healthcare workers' union collected 1.6 million signatures; [the first poll runs 48% in favor to 41% against](https://thehill.com/homenews/campaign/6033661-prop-40-billionair-tax-poll/). The state's top rate is already the nation's highest — 14.4% on wage income above a million — and [the top 1% of filers supply about 40% of all income-tax revenue](https://factually.co/fact-checks/finance/california-income-tax-share-top-1-percent-top-0-1-percent-00808f), a base that rolls the state budget like a deck in a swell whenever the market moves.
An honest aside: the blue states are no monolith. Hawaii in 2024 passed [the largest tax cut in its history](https://governor.hawaii.gov/main/addressing-affordability-unprecedented-tax-reform/) — for everyone, including the richest. In Illinois a millionaire-tax amendment [could not muster support even within the Democratic caucus](https://news.wttw.com/2026/01/05/despite-mounting-budget-pressure-illinois-graduated-income-tax-remains-political); in Connecticut a Democratic governor has buried similar bills three years running. And Los Angeles's “mansion tax,” Measure ULA, collected [$1.2 billion in three years against a projected $1.8–3.3 billion](https://xtown.la/2025/06/03/two-years-in-the-los-angeles-mansion-tax-is-generating-much-less-than-anticipated/) — forecasts miss in both directions, depending on who wrote them.
## What the data says: the great migration that mostly isn't
Now the crucial part. Are people moving? Yes. The way the headlines tell it? No.
The IRS's official data on interstate income migration is the best evidence in this debate, with one caveat: it lags by two to two and a half years. Here is what the three most recent available snapshots look like for the main “winners” and “donors”:
| Data year | Florida | Texas | California | New York | Illinois |
|---|---|---|---|---|---|
| 2020 (pandemic peak) | +$39.0bn | +$10.9bn | −$29.0bn | −$19.5bn | −$8.5bn |
| 2021–2022 | +$36.0bn | +$10.1bn | −$23.8bn | −$14.1bn | −$9.8bn |
| 2022–2023 (latest) | +$20.6bn | +$5.5bn | −$11.9bn | −$9.9bn | −$6.0bn |
Net interstate flow of adjusted gross income (AGI); IRS SOI data via Tax Foundation and Wirepoints.
Notice the direction? The effect is **weakening, not accelerating** — for all five states at once, winners and losers alike. The pandemic spike is normalizing. Fresher demography confirms it: per Census data for 2024–2025, Florida fell [from first to eighth place in domestic migration](https://www.census.gov/newsroom/press-releases/2026/population-growth-slows.html) — the inflow shrank from +310k people in 2022 to +22.5k. The main brakes are not taxes but [housing and insurance](https://www.axios.com/local/tampa-bay/2026/04/24/florida-affordability-housing-insurance-costs-population-growth-slowdown): the median Florida home now costs more than the US average, and insurance runs double.
More than that: Tax Foundation itself, the main supplier of “taxpayers are fleeing” maps, honestly concedes in its own regression that tax competitiveness explains [only ~11% of the variation in migration decisions](https://taxfoundation.org/data/all/state/taxes-affect-state-migration-trends-2023/). And the Tax Policy Center adds the detail that breaks the simple scheme entirely: in 2022, more New Yorkers moved [to neighboring high-tax New Jersey and Connecticut](https://taxpolicycenter.org/taxvox/high-tax-low-tax-headlines-miss-complexity-interstate-migration) than to Florida and Texas. People mostly follow jobs, family and square footage — not the tax table.
Why, then, do high-tax states' budgets genuinely bleed? Because the migration of wealth is not the same as the migration of people. The academic literature offers a remarkably consistent fork. People with portable income respond to taxes strongly: foreign footballers show a migration elasticity [around one](https://www.aeaweb.org/articles?id=10.1257%2Faer.103.5.1892), foreigners on Denmark's preferential scheme [1.5–2.0](https://eml.berkeley.edu/~saez/kleven-landais-saez-schultzQJE14danishscheme.pdf), “star” scientist-inventors [1.8](https://www.nber.org/papers/w21120). Rooted rich people barely move: among US income-millionaires, [only ~2.4% change state in a year](https://www.governing.com/finance/taxing-millionaires-will-send-them-fleeing-not-so-much); the elasticity of New Jersey millionaires after the 2004 hike was [below 0.1](https://cristobalyoung.com/wp-content/uploads/2018/11/NTJ-millionaire-migration-state-taxation.pdf), and of London non-doms after the 2017 reform — [0.02](https://docs.iza.org/dp16432.pdf). It is not wealth as a class that flees — it is portable income: fresh, mobile, not yet rooted. Settled capital mostly stays and pays.
The budget problem is that even a handful of people from the tail of the distribution amounts to state-scale money. Jeff Bezos moved from Seattle to Miami in late 2023 — officially to be closer to his parents and Blue Origin — and shortly afterwards sold $8.7 billion of Amazon stock. In Washington State, with its capital-gains tax, that would have cost him a nine-figure sum; Florida took nothing. Estimated savings: [$610–700 million](https://www.cnbc.com/2024/02/12/jeff-bezos-move-to-miami-will-save-him-over-600-million-in-taxes.html). Ken Griffin moved Citadel from Chicago to Miami and is building [a $2.5 billion headquarters](https://commercialobserver.com/2024/08/ken-griffin-citadel-securities-hq-miami-brickell-bay-drive/) there — the phenomenon already has a name, “Wall Street South.” One Bezos is statistically invisible in the migration tables — and entirely visible in a state budget.
## Europe: the same game, different flags
Carry this mechanism across the ocean and you find it again, only with borders. The role of the “blue states” is played by countries raising taxes on capital; the role of Florida — by a dozen jurisdictions deliberately building magnet regimes.
The season's chief donor is Britain. In April 2025 it abolished the non-dom regime that had existed for over two centuries: newcomers now get four preferential years, after which they pay like everyone else, and once you have lived there ten years, [your worldwide assets fall under the 40% inheritance tax](https://taxscape.deloitte.com/article/reform-of-the-uk-s--non-dom--regime--inheritance-tax-and-trusts.aspx). High-profile departures followed promptly: steel magnate Lakshmi Mittal [decamped to Dubai](https://gulfnews.com/business/arcelormittal-billionaire-lakshmi-mittal-leaves-uk-for-dubai-amid-tax-reforms-1.500357605), the Livingstone developer brothers, worth £9 billion, [to Monaco](https://www.bloomberg.com/news/articles/2025-04-24/british-brothers-worth-9-billion-quit-uk-as-wealth-exodus-grows). How many left in total — the honest answer is that nobody knows precisely, and there is a section below on why the “16,500” you saw in headlines is not worth the paper. Official HMRC data for the first post-reform year arrives [no earlier than 2027](https://bmmagazine.co.uk/finance/non-dom-tax-take-hmrc-figures-2026/).
Where they go is well visible:
| Jurisdiction | Mechanism | Price tag | Limits |
|---|---|---|---|
| Italy | flat tax on all foreign income | €100k (2017) → €200k (2024) → [€300k from 2026](https://www.imidaily.com/europe/its-official-italy-raises-its-flat-tax-to-e300000/) | up to 15 years |
| Switzerland | forfait — tax on spending, not income | typically CHF 250–300k/yr | [~4,700 people, 19 of 26 cantons](https://ins-globalconsulting.com/news-post/lump-sum-taxation-switzerland/) |
| Cyprus | non-dom: 0% on dividends and interest | a 2.65% health levy | [17 → up to 27 years from 2026](https://www.evidentrust.com/cyprus-non-dom-status-2026-complete-guide/) |
| Greece | flat tax on foreign income | €100k/yr + €500k investment | 15 years; [officially just 213 participants](https://www.astons.com/news/greek-non-dom-tax-regime-complete-guide-for-non-residents-in-2025/) |
| Monaco | no personal income tax at all | property from €1m realistically | population 38,857, [+163 Britons in 2025](https://news.mc/2026/05/22/monaco-population-nears-39000-as-latest-census-reveals-shifting-resident-profile/) |
| Portugal | IFICI (“NHR 2.0”): 20% flat rate | science/tech/innovation only | 10 years; old NHR closed |
The Italian case is the most eloquent: the price of the “ticket” tripled in eight years — from €100k to €300k a year — and demand did not vanish. It is an auction, and Milan is outbidding London in it.
Now the donors. Norway raised its wealth tax to 1.1% in 2022 — and within a year [more than 30 billionaires and multimillionaires left](https://thedailyeconomy.org/article/how-billionaires-became-an-endangered-species-in-norway/), more than in the previous thirteen years combined; the richest of the emigrants, Kjell Inge Røkke, settled in Swiss Lugano. But the plot is more interesting than the meme about “socialists chasing away the rich”: in 2024 Norway tightened its exit tax — 37.8% on unrealized gains above NOK 3 million on departure — and [the outflow slowed markedly](https://www.canadianaffairs.news/2025/10/24/norways-wealth-tax-drove-out-the-rich-without-breaking-the-bank/). The emigrants, it turned out, had supplied [only 2% of wealth-tax revenue](https://www.nrk.no/norge/sveits-utflytterne-stod-for-2-prosent-av-formuesskatten_-_-veldig-begrenset-1.17877713); collections kept growing, and in the September 2025 election Norwegians [re-elected Labour and the tax survived](https://news.bloombergtax.com/tax-insights-and-commentary/norway-wealth-tax-victory-shows-visible-fairness-still-matters). A media catastrophe turned out to be a budget-manageable event.
France demonstrated the opposite — the limits of political feasibility. Parliament buried the Zucman tax (a 2% minimum on fortunes above €100 million) three times: the Senate rejected it in June 2025, the Assembly in October, [the Senate again in November](https://www.publicsenat.fr/actualites/parlementaire/budget-2026-le-senat-rejette-a-nouveau-la-taxe-zucman). An attempt to restore the tough 2011-vintage exit tax also [fell out of the final 2026 budget](https://www.hagnere-patrimoine.fr/guides-patrimoine/fiscalite-non-residents/exit-tax-2026). Meanwhile fresh research from the government's Council of Economic Analysis says wealthy French people emigrate [half as often as the average citizen](https://ceoworld.biz/2025/09/08/frances-wealth-tax-debate-myth-vs-reality-of-rich-exodus/) — 0.2% of the top 1% per year. Paris fears an exodus that barely exists in the data, and cannot pass a tax that half the parliament considers suicide. Stalemate.
Walls, meanwhile, are rising across the continent. Germany has extended its Wegzugsbesteuerung — the tax on unrealized gains at departure — [even to fund and ETF holdings above €500k](https://financemate.de/calculators/exit-tax) from 2025. Belgium, for decades a haven for private capital, [introduced its first-ever 10% capital-gains tax on 1 January 2026 — with its own exit tax attached](https://www.ey.com/en_be/insights/tax/the-new-belgian-capital-gains-tax-what-changes-in-2026). The logic is simple: before raising taxes, brick up the exit. And a final brushstroke on the map: Spain — the only EU country with a full annual wealth tax — contains its own private Florida: Madrid and Andalusia grant [a 100% relief on the regional share of that tax](https://taxfoundation.org/research/all/eu/2025-spanish-regional-tax-competitiveness-index/), so wealthy Catalans “emigrate” to Madrid without crossing a single border. The divergence is fractal — it reproduces at every level where rates enjoy any autonomy.
## The world: magnets, walls, and a data crisis
At the global level the picture is the same, only starker — and this is where the theme's most consequential methodological scandal lives.
The magnets first. The UAE — zero personal tax, 9% corporate, golden visas, and since February 2026 [no more 50% down-payment requirement on property](https://www.sovereigngroup.com/news/uae-golden-visa-update-removal-of-minimum-down-payment-requirement-for-property-owners/). Saudi Arabia hands multinationals [30 years of zero tax for a regional headquarters in Riyadh](https://kpmg.com/sa/en/insights/tax-insights/tax-alert-tax-incentives-are-announced-for-the-rhq-program.html) — 200+ licenses issued already. Hong Kong revived its investor visa and in two years took in [nearly 3,200 applications worth ~HK$95 billion](https://www.info.gov.hk/gia/general/202603/02/P2026022700711.htm). Singapore, after a SGD 3 billion money-laundering scandal, stopped being an automatic vault — family offices now face genuine scrutiny, and the flow of Chinese money [has visibly shrunk](https://www.asiasentinel.com/p/chinese-family-offices-singapore-fall-sharply).
Now about the data the whole global narrative stood on. For five straight years, figures like “16,500 millionaires will leave Britain in 2025, the UAE will receive 9,800” were supplied by one company — Henley & Partners, a relocation consultancy for the wealthy. In July 2025 an independent forensic analysis [took the methodology apart](https://taxpolicy.org.uk/2025/07/27/henley-partners-millionaire-migration-report-analysis/): “residency” was drawn from LinkedIn profiles, and when real estate was removed from the wealth database between reports, the count of “millionaires” barely changed — statistically impossible under the declared method. Tax Justice Network spoke of [fabricated data](https://taxjustice.net/press/millionaire-exodus-study-drops-author-and-numbers-after-fake-data-accusations/). The finale is telling: in its [2026 report](https://www.henleyglobal.com/publications/henley-private-wealth-migration-report-2026) Henley dropped the database's author, dropped the precise numbers, and replaced them with a 100-point “wealth mobility” index. The famous “−16,500 from Britain” quietly became “+15% applications for our services from people with a UK address.” A company that earns money moving the rich spent five years selling the world statistics about how the rich are moving — while official HMRC statistics showed outflows [within the government's own forecast](https://taxjustice.net/press/hmrc-data-debunks-uk-non-dom-exodus-claims-ft-reports/) all along. This does not mean migration is absent. It means its chief measuring device was a salesman of the product it measured.
Even without Henley, though, the systemic shifts are visible. The United States — one of only two countries taxing by citizenship — set [a record for passport renunciations since 2020](https://taxopilot.com/guides/us-exit-tax-renunciation/) (nearly 4,820 in 2024), each wealthy leaver paying the §877A exit tax on the way out. In parallel, the Trump administration launched the “Gold Card” — a green card for $1 million, with promises of a million cards sold and five trillion dollars of revenue; as of April 2026 [exactly one application had been approved](https://www.forbes.com/sites/saradorn/2026/04/23/trumps-gold-card-visa-flops-only-one-approved-so-far/). Europe is closing golden visas (Ireland, the Netherlands, Spain in succession), the EU Court of Justice [ruled Malta's citizenship-by-investment illegal](https://asil.org/insights/volume-29-issue-8/), and the Caribbean schemes are being [squeezed from both Brussels and Washington](https://www.astons.com/blog/countries-under-eu-and-us-pressure/). Global coordination, meanwhile, is stalling: the US has [effectively walked out of the Pillar Two minimum tax](https://www.cato.org/blog/end-oecd-global-minimum-tax-what-obbba-means-pillar-two), the 2% billionaire-tax idea is stuck at the level of a G20 declaration, and even the CARF crypto-data exchange starts in 2027 — but [it is precisely the UAE, Singapore, Switzerland and Hong Kong that postponed their start to 2028](https://www.taina.tech/resources-news-and-awards/48-jurisdictions-commit-to-implement-the-crypto-asset-reporting-framework-carf-by-2027). A year's head start, for those who understand.
On why “zero tax” in the brochure jurisdictions grows substance requirements, CFC rules and a hidden price tag in practice, we wrote in detail in [“The 0% tax subscription”](/en/blog/nul-podatku-pidpyska/) — here we only note: between “moved to Dubai” and “legally stopped paying at home” lies a chasm inhabited by tax lawyers.
## The Ukrainian bill
On this map Ukraine looks unusual: formally we are a low-tax jurisdiction that people leave for reasons other than rates.
The numbers are these. Since December 2024 an employee gives up [23% of salary — 18% income tax plus a 5% military levy](https://www.kmu.gov.ua/news/minfin-pidpysano-zakon-pro-derzhbiudzhet-2025-i-podatkovi-zminy-dlia-finansuvannia-syl-oborony-ta-zabezpechennia-finansovoi-stabilnosti). A group-3 private entrepreneur pays 5% single tax plus a 1% military levy on turnover, [up to UAH 10.09 million a year](https://monobank.ua/en/knowledge-base/fop/fop-3-grupa-2026). Diia.City offers 5% personal tax for specialists and a 9% distributed-profit tax for the company — with [a state guarantee the terms stay unchanged for 25 years](https://bdf.gov.ua/pravovyy-rezhym-diia-siti-ne-zminytsia-vprodovzh-25-rokiv/); the regime has grown to [over 4,500 residents](https://finclub.net/news/kilkist-rezydentiv-diiasitu-zrosla-maizhe-do-4-tysiach.html), doubling in a year. Against Poland's 12% lump-sum, Bulgaria's 10% or Cypriot structures, Ukrainian rates are perfectly competitive — on paper.
Yet business migration continues, and its cause deserves naming honestly: security and mobilization, not the tax table. Per the tax service, Ukrainians have already [declared 4,536 controlled foreign companies](https://news.finance.ua/ua/ukrainci-zadeklaruvaly-ponad-4-5-tysyachi-kompaniy-za-kordonom-de-naybil-she-reyestruyut-biznes): a quarter in Poland, then Britain, the US, Cyprus, Estonia. In 2025 alone Ukrainians filed [33.8 thousand applications for Poland's sole-trader equivalent](https://news.finance.ua/ua/ukrainci-zadeklaruvaly-ponad-4-5-tysyachi-kompaniy-za-kordonom-de-naybil-she-reyestruyut-biznes). The decree allowing [men aged 18–22 to leave the country](https://mvs.gov.ua/news/roziasnennia-shhodo-viyizdu-za-kordon-colovikiv-vikom-18-22-rokiv-vkliucno) (August 2025) added a stream of the young — the service sector felt it first.
And here a Ukrainian should absorb the main lesson of this whole story: the world he is moving his company into is already wired with transparency systems. CFC reporting has applied since 2022, the fine for a missed report is [UAH 332,800](https://7eminar.ua/news/22964-stroki-davnosti-dlya-perevirok-shho-potribno-znati-platnikam-pislya-1), the wartime moratorium on penalties rests on martial law rather than the calendar, and audit limitation periods have already begun to thaw. CRS automatically carries data on foreign accounts home; from 2027 crypto joins via CARF. The game of “I'll quietly register a company in Cyprus and nobody will know” ended before the great tax divergence even began. Legal routes remain — Diia.City at home, transparent structures abroad — but all of them assume you pay someone somewhere, rather than no one nowhere.
## What follows
Three conclusions that rest on data rather than headlines.
First: the divergence is real and deepening. States and countries no longer converge toward the middle — they are deliberately pulling apart into opposite models, and every move between them becomes an ever-larger fiscal event. The triggers will finish their work: by the 2030s the US will almost certainly have a tenth state with no income tax, and several states with rates near 15% for the rich.
Second: the mass “flight of the rich” is largely a myth sold by those who profit from relocations. Official data stubbornly shows the same thing: the overwhelming majority of wealthy people are rooted — by business, family, children's schools — and pay the higher taxes, grumbling but not packing. Massachusetts has beaten its millionaire-tax plan three years running; Norway survived a “catastrophic exodus” of billionaires at the cost of 2% of one tax's revenue.
Third, and most practical: the mobile tail exists, and its price is out of all proportion to its headcount. One Bezos costs a state more than a thousand millionaire doctors who will never leave. So smart jurisdictions argue less and less about average rates and fight more and more over the tail: magnets raise the ticket price (Italy — threefold in eight years), donors brick up exits (Norway, Germany, now Belgium). Tax competition is ceasing to be a competition of rates and becoming a competition of architectures — entrances, exits and guarantees. Who ends up living better will be shown not by manifestos but by budget reports five years from now. The current score: both sides keep missing their forecasts — each in its own direction.