We’ve been hearing a lot lately (see the last post, for example) about taxes driving away wealthy people. If we raise taxes on the rich to what they were during the Clinton Administration, apparently the poor dears will get the vapors and move away, and then where will we be? Because we all know that wealthy people are our benefactors and give us jobs.
You might have seen a video that was making the rounds a few days ago, which I can’t find now. A bagger woman ranted at a Green Party candidate that if you tax the rich they’d all move away, and then where would we be? She was a volunteer serf.
Anyway, the Wall Street Journal reports on a study done in New Jersey showing that a state tax increase on income above $500,000, which was imposed in 2004, didn’t cause a mass exodus of rich people from New Jersey. The millionaire population increased, in fact.
And the point is that the well-off want to live where they want to live, and if some of ’em want to live in New Jersey — it takes all kinds, I guess — they will live there.
I am living in a county with the second-highest property taxes in the country. The “tax burden” in New York state is among the highest in the country. The high tax burden has been in place for a long time, yet extremely wealthy people continue to live here, and I’m not seeing them move to Texas or Mississippi or Somalia. That’s because they want to live here. It’s expensive to live here, but it’s still considered a “desirable” area by the well-to-do, which is why it’s expensive to live here. The retirees tend to relocate to places like Vero Beach and Hilton Head, but that’s more because of climate than taxes.
Raising federal taxes on the wealthy is unlikely to drive many of them away from the U.S., for the simple reason there aren’t many civilized places they could go where they wouldn’t be taxed just as much if not more. Yes, they might be able to find a spot on some tropical island, but if they want to live where lots of stuff is going on — where there are parties and culture and shopping and snooty schools and five-star restaurants — that’s not going to work.