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The Risk for High-Tax States: The Wealthy Could Flee
We should take note of Fitzgerald's distinction between the very rich and everyone else, including the "merely" affluent. (Note that he really was talking about wealth, but in the context of taxes, one is usually talking about income.)
People seem to fixate on round numbers. In the case of income, that's $1M/year. It's used as a benchmark in this article ("Wyoming also has the highest average income among those making over $1 million annually"). @Maurice suggested that if the Fair Share Amendment became law in Massachusetts (which would add 4% to the tax on income above $1M), "a lot more smart people [would be] leaving the state."
So let's work with that $1M figure. FWIW a $1M income puts you well into the 1% crowd. You need "only" $300K (individual) or $430K (household) to break into the top 1%. (2016 figures found here.)
The article suggests that these "upper crust generally have more options and tend to move where they’re taxed less harshly." That may be true for the affluent, but not for this crowd.
"Persistent millionaires"—those who earn $1 million or more year after year—have the lowest overall migration rates (1.9 percent). ... When all is said and done, the super-rich tend to migrate less then the rest of us. The reason for this is simple—most people depend on the places they live for their incomes, since their businesses are based there.
I've been hearing this "they'll all move" crap for sixty years now with respect to California. If they want to move to Alabama or Mississippi to lower their taxes, who cares? Good luck and good riddance.
The thing is someone who is wealthy doesn't have to move from a high tax state to a low tax one because, well, they're wealthy. They can pretty much afford to live wherever they want. And those who would be willing to move solely for that reason probably aren't the kind of rich people most states want because they'll use whatever tax dodges they can find including offshore accounts to avoid paying taxes in whatever state they live in anyway.
Comments
People seem to fixate on round numbers. In the case of income, that's $1M/year. It's used as a benchmark in this article ("Wyoming also has the highest average income among those making over $1 million annually"). @Maurice suggested that if the Fair Share Amendment became law in Massachusetts (which would add 4% to the tax on income above $1M), "a lot more smart people [would be] leaving the state."
So let's work with that $1M figure. FWIW a $1M income puts you well into the 1% crowd. You need "only" $300K (individual) or $430K (household) to break into the top 1%. (2016 figures found here.)
The article suggests that these "upper crust generally have more options and tend to move where they’re taxed less harshly." That may be true for the affluent, but not for this crowd.
America's super-rich move around the country far less than everyone else
http://www.businessinsider.com/americas-super-rich-are-less-mobile-than-lower-income-workers-2016-6