The result is that the rich begin to slowly trickle out, at a rate that is not fast enough to make the negative repercussions of the involuntary income redistribution that voters support apparent to them.
Puerto Ricans aren't new to tax benefits which allow them to become prosperous.
For the former tax haven: it loses out on capital growth, which means less economic growth.
Take someone with $5MM in investable assets. Using a simplistic 4% rule of thumb, that can generate $200K of income per year. Tax that at 4%, and you have $192K to spend. Tax it at a blended 25% and you have $150K to spend. At that level of income, $3500/month is very much a noticeable difference, IMO. ($16K/mo vs $12.5K/mo spendable.)
Now, consider that $150K/yr living in the mainland US goes farther than $150K/yr on Puerto Rico, and someone with $5MM and eligible for Act22 isn't going to move to PR without Act22.
Peter Schiff's quote in the article sums it up very well, I think: “Who would come to a bankrupt island to pay high income taxes?”
The question is Puerto Rico's motivation/justification/choice to offer Act 22 tax advantages to bring the majority of that $192K of spending onto the island or not.