There's a basic rule of taxation: if you want to get more tax income you can increase taxes - but only a bit. If you stray too far down that track, all you'll do is make it more rewarding for people to avoid paying it.
It seems we may have hit this point, as the rich are leaving Britain in droves. The latest to go is Simon Nixon, the man behind Moneysupermarket.com. So why is he leaving, and what can the government do to stop this exodus?
NixonThe Telegraph reported that Nixon was making a move to save paying tax. He founded moneysupermarket in 1999, floated it in 2007, and in the process made himself incredibly wealthy. In fact at the time he was Britain's richest entrepreneur under the age of 40.
He now owns 50% of the company, where he works as Deputy Chairman, and according to the Sunday Times Rich List is the 55th richest person in the UK, worth £536 million.
His income comes in a large part from dividends on the shares he owns in the company, and by relocating he stands to save millions in tax every year on those dividends because Jersey doesn't charge tax on dividends - just on income (and even then it's only 20%).
RowIt adds fuel to the fire of the current row over companies and individuals avoiding tax in the UK. The row has been brewing over major multinationals like Starbucks and Google - which technically do not make a profit in the UK because of the way they internally account for income - and is reaching boiling point.
It is one of the reasons why the Autumn Statement is expected to include anti-tax-avoidance measures.
However, George Osborne has to be careful. The public wants to see him crack down on something they see as unfair. However, as Nixon's experience shows, if he goes too far and makes Britain's wealthy feel too squeezed, they will simply vote with their feet and leave the country.
But what do you think? Should we get tough and watch them go, or let the rules continue as they are? Let us know in the comments.