Hannity and Limbaugh have repeatedly claimed that higher taxes on the very wealthiest will cause them to leave high tax states but Robert Frank in the WSJ finds that ain't necessarily true.
Millionaire Tax Didn’t Chase the Rich From New Jersey, Study Says
April 20, 2011, 10:59 AM ET
By Robert Frank
The study, by sociologists Cristobal Young at Stanford and Charles Varner at Princeton, studied the migration patterns of New Jersey’s millionaires before and after 2004, when the state imposed a “millionaire’s tax” that raised rates on those earning $500,000 or more to 8.97% from 6.37%.
The study found that the overall population of millionaires increased during the tax period. Some millionaires moved out, of course. But they were more than offset by the creation of new millionaires.
The study dug deeper to figure out whether the millionaires who were moving out did so because of the tax. As a control group, they used New Jersey residents who earned $200,000 to $500,000–in other words, high-earners who weren’t subject to the tax. They found that the rate of out-migration among millionaires was in line with and rate of out-migration of submillionaires. The tax rate, they concluded, had no measurable impact.
“This suggests that the policy effect is close to zero,” the study says.
More devastating to the wingnut meme is the fact that the real job creators among the wealthy were LESS likely to leave than the rentiers:
The study found that New Jersey millionaires over the age of 65 and who live off their investments are the most likely to leave. Among those who earned their money from investments, the tax raised migration rates by 27 people per thousand among the top 0.1% of earners.
Yet those who own their own businesses or earn their money in New York–groups that account for a large share of millionaires in New Jersey–are less likely to leave.
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