World
US Gained Thousands Of New ‘Centi-Millionaires’ This Decade—But Some Could Leave Amid Election, Report Argues
Topline
The United States is home to one-third of the world’s centi-millionaires, or people with liquid assets of $100 million or more, as the number of super-wealthy residents soars, a new report from Henley & Partners said Tuesday—but the consulting firm argues election uncertainty, including a Democratic proposal to tax unrealized capital gains, may lead some people to move.
Democratic presidential candidate U.S. Vice President Kamala Harris waits to speak on Aug. 8, 2024.
Key Facts
The annual centi-millionaire report, compiled using data from global wealth intelligence firm New World Wealth, says there are 29,350 people across the world with liquid investable assets of at least $100 million, representing more than a 50% increase over the last decade.
The U.S. (home to about 9,850 as of March) and China have experienced what the report called a “centi-millionaire boom,” with American numbers surging 81% over the last 10 years and the country claiming the first three spots on a list of cities with the most people who have hit the milestone worldwide: New York City, the Bay Area of California and Los Angeles.
While those cities are still expected to see significant growth of their ultra-wealthy populations over the next decade, but David Young, president of the committee for economic development at The Conference Board, a think tank, said in the report the upcoming election could lead to a shift “as centi-millionaires turn to countries that provide greater economic and political security.”
Henley & Partners, which specializes in helping clients gain residency and citizenship abroad by investment, said the firm has experienced a five-fold increase in investment migration inquiries this year as wealthy Americans consider relocating (but wouldn’t specify how many people had inquired).
Peter Ferrigno, director of tax services at Henley, argued Democratic nominee and Vice President Harris’ plan to impose a 25% minimum tax on unrealized capital gains accrued by Americans with net worths of $100 million or more may cause people to look “very carefully at the US as a place to invest in.”
“Ferrigno warns there are “many good reasons” why other countries don’t tax unrealized capital gains—or increases in the value of investments that haven’t been sold for a profit yet—and experts at Henley have said more wealthy Americans than ever are looking to gain residency benefits or citizenship abroad to avoid the potential tax.
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What We Don’t Know
How exactly an unrealized gains tax would work, or if it’s likely to pass Congress even if Harris wins the election. The Democratic nominee in September said she supports a tax plan first laid out by President Joe Biden in 2022 that would introduce the 25% minimum tax on unrealized capital gains. Under the proposal, people with over $100 million in wealth would pay taxes on assets that appreciate in value through a year, even if they did not sell. As it stands, capital gains taxes are only charged on profits received from those assets. Critics have said enforcement of the plan would be incredibly difficult, adding additional work to an already strained IRS. The plan wasn’t passed under Biden, despite Democrats controlling both chambers, and some observers have said it’s unlikely the proposal would make any further headway under a Harris administration. Billionaire Mark Cuban, who has endorsed Harris, told CNBC his communications with Harris’ team have led him to believe “it’s not going to happen.” Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center, told CNBC there is “very little political support” for the plan.
Contra
Supporters of an unrealized capital gains tax argue the idea would prevent ultra-wealthy people from avoiding taxes by never selling off their assets. The Biden administration has estimated the unrealized capital gains tax would generate about $503 billion in tax revenue from the government’s 2025 to 2034 fiscal years. Harris has said the plan would force the wealthiest Americans to pay “their fair share” and level out tax inequities. From 2010 to 2018, the 400 richest Americans paid an effective average federal tax rate (including unrealized capital gains) of 8.2%, according to the White House, compared to the average federal income tax of more than 18%.
Crucial Quote
“We are witnessing a fascinating paradox,” Dr. Juerg Steffen, CEO of Henley & Partners, said. “On one hand, the US remains the world’s top wealth hub, accounting for over 30% of global liquid investable wealth — a massive $67 trillion. Yet, on the other hand, we’re seeing an unprecedented surge in affluent Americans seeking alternative residence and citizenship options.”
Key Background
The number of centi-millionaires across the world has steadily grown, Henley’s reports show, from 25,490 in 2022 to 28,420 in 2023 and 29,350 in 2024. China has seen the most dramatic increase—its centi-millionaire population has grown 108% over the last decade—followed by the United States at 81% and some smaller European markets like Monaco, Poland and Montenegro, which have each seen growth of 75% or more. Europe overall, however, has seen its population grow just 26%, which Steffan says can be blamed on “the slow growth of major markets such as the UK, Germany and France.” One third of the world’s centi-millionaires live in 50 cities across the world, 15 of which are in the United States. New York City (744 centi-millionaires), the Bay Area (675) and Los Angeles (496) are the most populated, followed by London (370), Beijing (347) and Singapore (336). Of the 50 cities with the highest population, seven are expected to experience “very high,” or more than 150%, centi-millionaire growth by 2024, including Austin, Texas and Palm Beach, Florida.
What To Watch For
Where centi-millionaire populations could boom. Hangzhou, China; Shenzhen, China; Taipei, Taiwan; Dubai, United Arab Emirates; and Abu Dhabi, United Arab Emirates are projected to see increases of over 150% in their centi-millionaire communities by 2024, the report said.
Tangent
The number of billionaires worldwide—and their net worths—is at an all time high. There were 2,781 as of this spring, Forbes data shows, 141 more than last year and 26 more than the record set in 2021. Those people have an aggregate worth of $14.2 trillion, up from $2 trillion from 2023 and $1.1 trillion above the previous 2021 record. The United States has the most concentrated billionaire population, followed by China and India.
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