Study Shows Increasing Taxes Didn’t Cause Millionaires to Move

Sociologists Cristobal Young at Stanford and Charles Varner at Princeton recently conducted a study of the migration patterns of New Jersey’s millionaires during a time period when New Jersey raised taxes on those earning $500,000 or more. The study found that, contrary to claims of anti-tax advocates, higher taxes on the wealthy did not lead to millionaire flight to other locations. In fact, the overall population of millionaires increased, suggesting that the policy effect is close to zero.

The study did find that some millionaires are more likely to leave than others. For example, millionaires over age 65 who are living off their investments are most likely to leave while millionaires who own their own businesses are less likely to leave.

See Robert Frank, Millionaire Tax Didn’t Chase the Rich From New Jersey, Study Says, W.S.J., Apr. 20, 2011.

Special thanks to Robert C. Young (Attorney at Law, Baltimore, MD) for bringing this to my attention.