The only problem is that the story assumes the subtext that governments need tax to fund expenditure. The fact is governments must spend first BEFORE they can tax, else how do dollars make it into the economy? Governments tax to manage demand in the economy for scarce resources, if they didn’t tax the economy would be flooded with dollars injected into the economy via government spending. It is worth noting that you can only pay taxes in Australia with Australian dollars, gold , us dollars etc , must be converted to Australian dollars before the payment of taxation liability. So it doesn’t really matter if rich people go elsewhere we still get to consume whatever is produced in the economy. The only limiting factor is the capacity of the economy to produce the goods and services, and this is where demand management via the taxation system comes in.
