Do millionaires move to avoid high taxes?
But even in those cases, researchers haven’t found much evidence that millionaires flee in the face of high taxes. Roger Cohen, Andrew Lai, and Charles Steindel at the New Jersey Department of the Treasury and Cristobal Young and Charles Varner of Stanford released studies in 2011 and 2012, respectively, evaluating the effects of New Jersey’s millionaire tax, which governor Jim McGreevey signed into law in 2004.<
Cohen, Lai and Steindel found that the rate increase caused 25,000 residents to leave the state by 2011, and cost the state about $150 million in tax revenue. But that is dwarfed by the $1 billion the rate increase brought in. The overall revenue effect of the tax, then, is still positive. Young and Varner found still smaller effects, estimating that 69.7 millionaires left — not 69,700, but a little short of 70 people. This cost the state $16.4 million, the vast majority of which was due to the flight of the top 0.1 percent, or those making over $3 million a year.