Another Myth Busted

It turns out that rich people do not relocate when a state raises taxes:

When it comes to taxes, millionaires have short fuses. Ratchet up their rates and they'll blow you off and move to a low-tax, or no-tax, state.

Or so goes one argument against taxing the rich: States that levy a “millionaires tax” risk chasing those millionaires away to Florida, Texas, and other places with no income tax. Hedge fund manager David Tepper's recent decision to move from New Jersey to Florida, possibly creating a billionaire-size hole in Jersey’s budget, raised alarms. Golf great Phil Mickelson, shortly after his infamous Dean Foods stock trade, complained about his high tax rate in California and threatened to move to Florida.

Now, a study based on 13 years of tax data finds that most millionaires don’t move cross-country just to avoid a tax bill. It turns out that the rich, while perhaps different from us, aren’t all that mobile. When they do move, it’s often for reasons that have nothing to do with taxes. For one thing, they appear to like the beach.

The study, published in the June issue of the American Sociological Review, suggests that states—and countries—may have some leeway to raise taxes on the wealthy without scaring away their tax base. It has obvious political implications, possibly serving as ammunition for those who favor taxing the rich. It could help advance the arguments of presidential candidates Hillary Clinton and Bernie Sanders, for example, who have both proposed higher taxes on upper-income Americans.

And if they did leave, good riddance.

If they leave, they lose political influence where they formerly lived, and the less influence that the self-obsessed pampered assholes have, the better.