Not really. Wealth attracts people primarily due to change in relative status as compared with other people. So if you do progressive taxation, someone who makes 1 million before tax still ranks higher than someone who makes 2 million before tax, even if ends up that they make 700,000 and 1,200,000 respectively. Due to the marginal utility curve of having more money, they really aren't that different off in other non-status related respects either.
It certainly can have adverse affects on investment payoffs that distort market logic; if you could figure out a way to progressively tax consumer consumption instead of income you could get around that.
Rich people who live in Hong Kong do not view their relative wealth like people who live in Manhatten, because they surely travel frequently and are thus acutely aware of just how much richer they are than everybody else on the planet, while rich people in Manhatten can get trapped in the cognitive bubble you are describing and misunderstand their relative wealth.
Singapore, being a rich island nation, works the same. If they started taxing the shit out of their rich it would certainly result in many of those people leaving the country and many, many more not setting up shop their in the first place.
Sure they do but on average a millionaire from HK is going to travel internationally a lot more - especially to poor countries - than a millionaire from New York, simply due to geography and living on a small island. All they have to do is walk over the border into Shenzhen to get a sense of just how rich they are. One could conceivably grow up in NYC and never grow to truly appreciate how much their life differs from those in the poorest parts of the World.
There are plenty of poor people in Manhattan, inequality is very high. But maybe you are right and rich people in Manhattan have more opportunity and desire to insulate themselves. I wouldn't know.
Queens/The Bronx/Harlem aren't that far from the Upper East Side... They're not Shenzhen by any means, but they should serve as a decent reminder, especially if they're aware that those places are relatively rich compared to lots of places.
It certainly can have adverse affects on investment payoffs that distort market logic; if you could figure out a way to progressively tax consumer consumption instead of income you could get around that.