Do millionaires move because of tax? The evidence from the US is that they don’t

Posted on

California is looking to increase its taxes on the richest in that state. And as a result all the usual mischief about the rich heading for the door has been widely heard.

So, the Silicon Valley Mercury News did an investigation aided by the Institute on Taxation and Economic Policy, a nonpartisan research group based in Washington D.C. And they found this:

As the more detailed report notes:

An analysis by this newspaper of IRS tax-return data shows that states that charge high income taxes — from California to New York to New Jersey — are home to the highest number of rich people per capita. And two-thirds of the states that don’t charge any income taxes actually have fewer numbers of millionaire residents per capita, the analysis shows.

Consider Florida and Texas, which are often cited as havens for rich movie stars, CEOs and athletes because they are income-tax free. California, on the other hand, has the nation’s second-highest income tax rate.

So in those three states, how many people earn at least $1 million a year for every 100,000 taxpayers?

Florida: 202. Texas: 217. California: 252.

It’s fairly easy to move in the US. But people don’t.

Shall me lay that myth to rest then?