The Millionaire Migration Scare

Although almost every state’s tax system favors the rich, few states increased taxes for this wealthy group during the recent recession. Many states continue to refuse to increase taxes for the rich because they fear a “millionaire migration.” These states fear that if they raise taxes for the rich, the rich will simply move to a different state with lower taxes.

Articles and reports covering the millionaire migration tend to contain misinformation or give correct information out of context. The Wall Street Journal published an article reporting that New York witnessed a 9.4% decrease in millionaire taxpayers following the state’s surcharge in 2009. The article failed to report, however, that every state experienced a decrease in its millionaire population between 2007 and 2009 as a result of the recession.

Many states have been hesitant to increase taxes for the rich largely because of the misinformation about the millionaire migration. “But what lawmakers need to know — and what the Wall Street Journal and others have been refusing to tell them — is that once you scratch the surface of the millionaire migration issue, it becomes abundantly clear that the anti-tax side’s claims have no substance.”

Carl Davis, The Millionaire Migration Myth: Don’t Fall for This Anti-Tax Scare Tactic, The Huffington Post, Mar. 31, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.