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Forum Post: No! Rich people don't flee when taxes go up!

Posted 1 year ago on Feb. 20, 2013, 4:42 p.m. EST by repubsRtheprob (1209)
This content is user submitted and not an official statement

http://www.nytimes.com/2013/02/16/business/high-taxes-are-not-a-prime-reason-for-relocation-studies-say.html?pagewanted=all

By JAMES B. STEWART Published: February 15, 2013 274 Comments

Last month, Vladimir V. Putin hugged his newly minted fellow Russian citizen, the actor Gerard Depardieu, posing for cameras at the Black Sea port of Sochi. “I adore your country,” Mr. Depardieu gushed — especially its 13 percent flat tax on personal income.

Sochi may not be St. Tropez, but it does have winter temperatures in the 60s and even palm trees. Mr. Putin’s deputy prime minister confidently predicted a “mass migration of wealthy Europeans to Russia.”

Here in the United States, the three-time Masters champion Phil Mickelson recently walked off the 18th hole at Humana Challenge and said he might move from California because the state increased its top income tax rate to 13.3 percent from 10.3 percent.

“Hey Phil,” Gov. Rick Perry of Texas wrote in a Twitter message, “Texas is home to liberty and low taxes ... we would love to have you as well!!” Tiger Woods later said that he had left California for Florida for just that reason years ago. Mr. Mickelson can “vote with his Gulfstream,” a Wall Street Journal editorial noted, and warned California to “expect a continued migration.”

It’s an article of faith among low-tax advocates that income tax increases aimed at the rich simply drive them away. As Stuart Varney put it on Fox News: “Look at what happened in Britain. They raised the top tax rate to 50 percent, and two-thirds of the millionaires disappeared in the next tax year. Same things are happening in France. People are leaving where the top tax rate is 75 percent. Same thing happened in Maryland a few years ago. New millionaire’s tax, the millionaires disappeared. You’ve got exactly the same thing in California.”

That, at least, is what low-tax advocates want us to think, and on its face, it seems to make sense. But it’s not the case. It turns out that a large majority of people move for far more compelling reasons, like jobs, the cost of housing, family ties or a warmer climate. At least three recent academic studies have demonstrated that the number of people who move for tax reasons is negligible, even among the wealthy.

Cristobal Young, an assistant professor of sociology at Stanford, studied the effects of recent tax increases in New Jersey and California.

“It’s very clear that, over all, modest changes in top tax rates do not affect millionaire migration,” he told me this week. “Neither tax increases nor tax cuts on the rich have affected their migration rates.”

The notion of tax flight “is almost entirely bogus — it’s a myth,” said Jon Shure, director of state fiscal studies at the Center on Budget and Policy Priorities, a nonprofit research group in Washington. “The anecdotal coverage makes it seem like people are leaving in droves because of high taxes. They’re not. There are a lot of low-tax states, and you don’t see millionaires flocking there.”

Despite the allure of low taxes, Mr. Depardieu hasn’t been seen in Russia since picking up his passport and seems to be hedging his bets by maintaining a residence in Belgium. Meanwhile, Russian billionaires are snapping up trophy properties in high-tax London, New York and Beverly Hills, Calif.

“I don’t hear about many billionaires moving to Moscow,” said Robert Tannenwald, a lecturer in economic policy at Brandeis University and former Federal Reserve economist. Along with Nicholas Johnson, he and Mr. Shure are co-authors of “Tax Flight Is a Myth,” a 2011 research paper.

Of course, some people do move for tax reasons, especially wealthy retirees, athletes and other celebrities without strong ties to high-tax locations, like jobs and families. In renouncing his French citizenship, Mr. Depardieu follows other French celebrities, the chef Alain Ducasse, the singer Johnny Hallyday and Yannick Noah, a former tennis star. Several Paris hedge fund managers have decamped to London and the fashion mogul Bernard Arnault applied for Belgian citizenship, though not, he has said, for tax reasons.

Stars like Mr. Depardieu and Mr. Mickelson certainly have incentives to move. Mr. Depardieu complained that he paid 85 percent of his income in taxes in France last year and has paid 145 million euros over 45 years. France has a top rate of 41 percent as well as a wealth tax, and the Socialist president, François Hollande, is trying to impose a temporary surcharge of 75 percent on incomes over 1 million euros. Mr. Mickelson earned more than $60 million last year, Sports Illustrated estimates, which means the three-percentage-point California tax increase could add up to an additional $1.8 million in tax.

Gregory Mankiw, an economist at Harvard, said that tax rates did affect migration, at least of certain groups. “Rich people can pretty much live anywhere,” he said. “If you’re a retired person trying to decide between Palm Beach and Santa Barbara, the tax difference between Florida and California is huge. If you’re an academic choosing between Stanford and Harvard, it might be a factor.” (Massachusetts has a flat income tax rate of 5.3 percent.)

For this affluent and mobile group, it doesn’t much matter where their official residence is. Mr. Mickelson and Mr. Woods travel the tournament circuit throughout the year. Very wealthy people often have multiple homes in different locations, even different countries, and can shuttle among them to avoid local taxes. One reason so many luxury apartments in Manhattan sit empty is that their foreign owners can’t spend more than half the year in them without incurring United States income tax liability.

A star like Mr. Depardieu “can go to Paris whenever he wants,” Mr. Shure noted. Professor Tannenwald agreed. “People who are very rich, who are retired or who aren’t tied to a particular location, do change their residency at a high rate based on tax differentials.”

But there aren’t many people like that. “Tax-induced flight is rare,” Professor Tannenwald said. “The rate of interstate migration is low to begin with. To the extent that people leave a state, or shun a potential destination, they do so primarily for other reasons, such as to find more affordable housing, better job prospects or a more attractive climate.”

Low-tax advocates like Mr. Varney point to Maryland as a prime example of tax flight. Maryland created a millionaire tax bracket in 2008 with a top rate of 6.25 percent. But a year later, the state reported that the number of millionaires filing returns had dropped by a third, and that total tax revenue from the group fell despite the rate increase. After a chorus of media criticism — “Millionaires flee Maryland taxes” (The Washington Examiner) and “Millionaires Go Missing” (The Wall Street Journal) — the state legislature let the increase expire in 2011.

But a study by the Institute on Taxation and Economic Policy, a nonprofit research group in Washington, found that nearly all the decline in millionaires was the result of a drop in incomes largely attributable to the stock market plunge and recession, and not to migration — “down and not out,” as the study put it.

In 2009, just 364 people in the millionaire bracket moved from Maryland or died (the data didn’t distinguish between the two) — about the same percentage who disappeared in 2007, before any tax increase. And in 2009, more than 1,500 taxpayers entered the millionaire rolls, either because they earned more or moved to Maryland that year. That data “directly contravenes the notion that changes in tax policy were discouraging the affluent from working hard and earning substantial sums of money, or driving them out of the state altogether,” the study concluded.

Professor Young said his study looked at every millionaire tax record filed in California over the last 20 years, and “neither tax increases nor tax cuts on the rich have affected their migration rates.” He said that the two major tax overhauls before the recent increase didn’t have any effect on migration rates of millionaires. “Among the very richest, people making more than $2 million, out-migration actually declined slightly after the 2005 millionaire tax,” he said.

Why didn’t they move? Professor Young said that for most people, even the very affluent, it’s not that easy, since most successful businesses and high-paying jobs are tied to specific locations. In addition, “entrepreneurship and earning power are clustered in highly competitive regions like Silicon Valley, Los Angeles and New York City,” he said. “People making over a million are typically close to their peak income years, and are enjoying the fruits of long-term career investments. This is hard to walk away from.”

His research in New Jersey found that, while some people left, any lost revenue was more than made up for by added revenue from people who stayed. He estimated that New Jersey’s 2004 tax increase on incomes over $500,000 raised nearly $1 billion a year, “with little cost in terms of tax flight.”

Mr. Shure added, “I can say flatly that no state has ever raised taxes and lost money.”

Yet the tax flight myth remains surprisingly persistent, fanned by media coverage of celebrities, who are among those most likely to have the means and motive to choose a home based on tax considerations. “You can always find an anecdote.” Mr. Shure said. “Many people want this to be true as a way to discourage tax increases. The rich are always trying to find ways to make the middle class make their arguments for them.”

92 Comments

92 Comments


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[-] 2 points by JEDL (2) 1 year ago

There was not a problem with inequality before all the tax cuts. When large corporations were paying a higher tax rate, investing in their company (including paying a fair wage) was sort of a tax break. Now they have no incentive to pay a living wage to their employees. When they just keep the vast amounts of $$$ their employees earn for them, they only have to pay a small percentage in tax. They win, the employees lose. The worst problem is that the wealthy politicians are the only ones with any power to change any of this, and it would only hurt themselves, so it will not change.

[-] 2 points by inclusionman (7064) 1 year ago

Tax fairness means higher taxes on wealthy, lower taxes on the working class.

Take the poll

http://www.sanders.senate.gov/polls/?uid=b6ddcbb9-6f60-48e6-b98b-4ea97e490d41

[-] 1 points by inclusionman (7064) 1 year ago
[-] 0 points by repubsRtheprob (1209) 1 year ago

It WILL change because the power of the people is greater than the people in power.

As soon as enough of us realize that thingswill absolutely change.

Don't give up!

[Removed]

[-] 1 points by OTP (-203) from Tampa, FL 1 year ago

Labor is why they would leave. Labor is why they have already left.

[-] 1 points by inclusionman (7064) 1 year ago

Reimpose 94% taxrate on income over $2.6 mil.

http://www.nationofchange.org/why-we-tax-timely-reminder-tax-day-1364829791

Whaddyathink?

[-] 1 points by inclusionman (7064) 1 year ago

Oppose ceo engineering low taxes for themselves

http://thehill.com/blogs/on-the-money/domestic-taxes/288891-ceos-set-tax-reform-goal-25-percent-corporate-rate

Higher taxes on business.

[-] -1 points by repubsRtheprob (1209) 1 year ago

The rich have not left. I disagree. Tax 'em up the ass!!!!!! And give the money to labor!!

[-] -1 points by BlueMonday (-154) 1 year ago

and after you have taken all their money, then what?

[-] 2 points by repubsRtheprob (1209) 1 year ago

I didn't say take all their money. Thats you blatantly lying and creating a straw man (false argument). I guess you can't stick with the truth.

They can remain rich. I will allow that. They just have to stop hoarding ALL the wealth at the expense of 99% of the country.

[-] -1 points by BlueMonday (-154) 1 year ago

YOU said " bleed them dry". Now YOU will allow people to keep their own money, how generous of you. there is nothing wrong with people not spending their money, its their money to do with as they see fit to do. how about this, i spent too much money last month and im going to take your money to pay my bills, that o.k. with you?, no,.....too bad, im doing it anyway.

[-] 0 points by repubsRtheprob (1209) 1 year ago

The 1% have been taking the money of the 99% for more than 30 years.

Time to correct that crime. And justice demands the people get their money back.

Stop advocating for the richest against you own class. Have some decency, and honor!

[-] 0 points by BlueMonday (-154) 1 year ago

the 1% dont take anyones money, they earn their money. i do not belong to a " class" , though i am a part of an income group. P.S. you gave yourself away vq ,........ "decency , and honor".

[-] 2 points by repubsRtheprob (1209) 1 year ago

The 1% stole the peoples govt, changed the laws to allow them to squeeze, outsource, stagnate the wages of the 99%.

They took it we want it back.

I support the 99%, you are speaking in defense of the lazy, greedy, do nothing 1% criminals who crashed the world economy and took taxpayer bailouts.

[-] 0 points by BlueMonday (-154) 1 year ago

my, my, your time out for your breakdown didnt do much to help you. still frothing with spittle dripping down your chin(s). calm down vq, take some valium.

[-] 0 points by repubsRtheprob (1209) 1 year ago

I'm calm just fine. Stick to the thread topic. I guess you got nothing but personal attacks left. Keep it to yourself. I ain't impressed.

[-] 0 points by BlueMonday (-154) 1 year ago

oh, vq,.................you've outed yourself. seems re-education camp didnt work for you. i put a premise before you,...............i knowingly spent too much money last month, i cant pay the bills so im taking your money to do so. how do you feel about that?

[-] 1 points by repubsRtheprob (1209) 1 year ago

Tax the wealthiest @90%. Tax cap gains @ 90% over $1Million also.

create a 5% fin transaction tax!!! eliminate the Social Security payroll cap so the wealthy pay as well.

Thats how I feel about it.

[-] -1 points by freakzilla (-161) from Detroit, MI 1 year ago

But how does VQ feel about it? The two of you were having harsh words over on that other thread.

[-] 2 points by inclusionman (7064) 1 year ago

No corps don't leave when taxes go up.

http://www.care2.com/causes/hey-corporations-its-time-to-stop-avoiding-taxes.html

And if they try to, we should grow a spine and tell them if they do we will cut off their access to this largest, richest, middleclass who buys any plastic crap you put in front of them. Simple. Done.

Its our world (the 99%) and they are just squirrels tryin to get a nut.

[-] 0 points by gnomunny (6587) from St Louis, MO 1 year ago

What thread was that? This I gotta see. VQ arguing with his other username. Classic!

[-] -1 points by repubsRtheprob (1209) 1 year ago

Your preoccupation with VQ is laughable!

Stick with the thread topic! Tax the rich. They won't flee! Any thoughts?

Or does your brain stop functioning with VQ? LOL What power he has over you and your little cabal.

[-] -1 points by BlueMonday (-154) 1 year ago

you're STILL not capable of answering my question.

[-] 2 points by repubsRtheprob (1209) 1 year ago

I can't answer the same question a 3rd time. You're just too stupid to converse with.

Sorry.

[-] -2 points by BlueMonday (-154) 1 year ago

vq, you have a new name and there was an attempt tp re-program you, but you're still an idiot. And as an idiot,.....you are one of the " useful idiots " of ows.

[-] 1 points by repubsRtheprob (1209) 1 year ago

Why the fuck did you take my money.

That IS the answer.

[-] -2 points by BlueMonday (-154) 1 year ago

its an analogy,.........................do you know what that is? look it up. "I" is a stand in for the govt. "you" is a stand in the the taxpayers. now re-read and try to comprehend. your usual bluster is wearing thin.

[-] 1 points by repubsRtheprob (1209) 1 year ago

kaggy? Wow. The issues man. Stick with the fuckin issues. Mental fuckin midget! Conspiracy wacko!

[-] 0 points by BlueMonday (-154) 1 year ago

try it again vq, here's the premis, i knowingly spend moe money than is have , when the bills come im , i go to you and demand that you pay for my fiscal irresponsibility. i take all your money, and then spend even more , bills come due, and since you dont have any more money i take all money your family has.. the problem i am spending money that i do not have and feel that i am entitled to take other peoples money . thats the govt for ya.

[-] 0 points by repubsRtheprob (1209) 1 year ago

Already did. You're just too stupid to understand.

[-] 0 points by BlueMonday (-154) 1 year ago

no, kaggy, you didnt. but if you think you did , then your meds are working.

[-] -1 points by nobnot (529) from Kapaa, HI 1 year ago

You "spent to much money and now want someone else's".This guy must be a banker.

[-] 2 points by inclusionman (7064) 1 year ago

Once upon a time corps paid taxes.

http://truth-out.org/news/item/15096-once-upon-a-time-corporations-paid-taxes

It's rime again. They won't flee.

[-] -2 points by nobnot (529) from Kapaa, HI 1 year ago

Once upon a time Robin Hood lived in a forest.

[-] 2 points by inclusionman (7064) 1 year ago

We could use him again. To get our money back from the 1% who have stolen it by bribing our govt and rigging the system against us.

[-] -2 points by nobnot (529) from Kapaa, HI 1 year ago

We could use him here.Seems the self proclaimed queen of Occupy is doing a bit of repression her self.Along with the administrators whom allow her to say anything she likes.Happy trails.

[-] 3 points by GirlFriday (17435) 1 year ago

What happened there, sock? Are you crying?

[-] 2 points by inclusionman (7064) 1 year ago

She can't control you, can she?

[-] -3 points by nobnot (529) from Kapaa, HI 1 year ago

No,but she does have imunity.She is allowed to say what others get the boot for.Makes you wonder if she is on a patroll.

[-] 2 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

WHAT??? YOU feel that she has no right to get pissed off at individuals who come on her post and do not address the topic but attack her?

GET REAL

And no this is not her post - this is just where the altercation traveled to.

[-] -1 points by nobnot (529) from Kapaa, HI 1 year ago

Well yes and no.Jess was here at the start.Mostly read and stayed informed.When he questioned her rude tactics he became a target.The word cockroach,kockwhore,etc was a common reply evan when not addressing the pig.After awhile he Just said fuck it.

[-] 1 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

Jess?

No such individual from the topic all the way through the thread to here.

So - you are involved in some sort of past game of vendetta?

Don't think you are gonna glean much sympathy there.

[-] 2 points by inclusionman (7064) 1 year ago

hm, I don't really keep track of who is banned and how. Maybe there is favoritism.

[-] 2 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

It "is" good for others to make note of the fact that the attack came from out of nowhere.


[-] 1 points by inclusionman (2651) 5 minutes ago

Oh I know. Just thought I would highlight that important fact. ↥twinkle ↧stinkle permalink

[-] 2 points by inclusionman (7064) 1 year ago

Indeed.

[-] 2 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

No prob - just passin by.


[-] 1 points by inclusionman (2651) 0 minutes ago

Seems fair to me.

Thanks for the help. ↥twinkle ↧stinkle permalink

[-] 2 points by inclusionman (7064) 1 year ago

And he never made any serious comment on the thread topic. Go figure.

[-] 0 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

Generally the way it goes in an attack. Topic does not matter - just the target.


[-] 1 points by inclusionman (2651) 2 minutes ago

And he never made any serious comment on the thread topic. Go figure. ↥twinkle ↧stinkle permalink

[-] 2 points by inclusionman (7064) 1 year ago

Oh I know. Just thought I would highlight that important fact.

[-] 0 points by DKAtoday (28285) from Coon Rapids, MN 1 year ago

Sure there is. Favoritism to supporters of OWS OCCUPY and dis-favoritism to attackers Of this Forum and OWS and OCCUPY in general.

Not so very hard to understand.

[-] 2 points by inclusionman (7064) 1 year ago

Seems fair to me.

Thanks for the help.

[-] -1 points by nobnot (529) from Kapaa, HI 1 year ago

Maybe.maybe not.Keep an eye out and see for yourself.Happy Trails.

[-] 2 points by inclusionman (7064) 1 year ago

I've stopped watching for that phenomenon. I prefer posting important Occupy related info/actions, or current event articles on the issues occupy pushes because they benefit the 99%.

[-] 1 points by GirlFriday (17435) 1 year ago

Where'd you run away to?

[Removed]

[-] 1 points by GirlFriday (17435) 1 year ago

You're a sock and a hot mess all rolled into one.

[Removed]

[-] -2 points by HCabret (-327) 1 year ago

She says whatever she wants because freedom of speech is absolute. The second you don't let her spew, the rest of us become less free.

GirlFriday, you are often a moron, but I will defend you till the day the world goes mad.

[-] 2 points by GirlFriday (17435) 1 year ago

Nah. You are always a moron. That said, it's all love, peace and chicken grease. Until it isn't. So, don't play victim with me, Pal. Sock puppets make you a suck ass troll.

[Removed]

[-] -2 points by HCabret (-327) 1 year ago

You too babe. :)

[-] 2 points by GirlFriday (17435) 1 year ago

You're a sock of a sock. Nothing more and nothing less.

[-] -2 points by HCabret (-327) 1 year ago

As long I'm made out of cashmere, I'm good.

Argyle not so much......

[-] 1 points by inclusionman (7064) 1 year ago

Occupy Day of action

Tell the 1% to pay their taxes.

https://www.facebook.com/events/341876482590723/

[-] -1 points by BlueMonday (-154) 1 year ago

no,..thats the way the US govt. works

[-] -2 points by nobnot (529) from Kapaa, HI 1 year ago

Maybe we should imprison the people that own the people that you refer to as goverment.It free the word of corporate induced dictatorship .

[-] 1 points by inclusionman (7064) 1 year ago

NOW supports Robinhood tax.

http://now.org/press/04-13/04-17.html

Take a stand for the 99%

[-] -2 points by nobnot (529) from Kapaa, HI 1 year ago

Off go the heads.

[-] 2 points by inclusionman (7064) 1 year ago

Progressive tax system needed.

http://prospect.org/article/happy-birthday-dear-income-tax

ALL benefit (the 100%) When we increase taxes on the wealthy, and cut taxes on the working class.

[-] 0 points by BlueMonday (-154) 1 year ago

how robespierre of you.

[-] -2 points by nobnot (529) from Kapaa, HI 1 year ago

Did you have to ask?

[-] 0 points by kendallone (-28) 1 year ago

What a load of horseshit.

[-] -1 points by repubsRtheprob (1209) 1 year ago

Don't believe the bullshit rich people use to scare us. They ain't goin anywhere.

Tax the lazy, do nothing, greedy, selfish rich already!!!

[-] 0 points by repubsRtheprob (1209) 1 year ago

So bleed them dry! 90% tax rate on income over $1million

[-] -2 points by Einsatzgruppen1 (-56) 1 year ago

So by this "logic" taxes on the "rich" can be at least 75% of their income and they'll gladly pay? And that would end our problems?

[-] 2 points by repubsRtheprob (1209) 1 year ago

Its a good start. You gonna advocate for the millionaire/Billionaire set?

[-] -2 points by Einsatzgruppen1 (-56) 1 year ago

I advocate for no one. But if you think that would truly change anything you are delusional.

[-] 2 points by repubsRtheprob (1209) 1 year ago

I disagree. I am clear headed and realistic in my goal to tax the rich & cut taxes on working class to correct the self destructive income inequity.

[-] -2 points by Einsatzgruppen1 (-56) 1 year ago

Good luck with that drone.

[-] 1 points by repubsRtheprob (1209) 1 year ago

Thank you. I have a whole movement (OWS), numerous newly emboldened progressive groups, and countless millions of the working class 99% with me.

[-] -1 points by Einsatzgruppen1 (-56) 1 year ago

You keep thinking that sweet cheeks.

[-] 1 points by repubsRtheprob (1209) 1 year ago

I know it! Your childish namecalling ("delusional, drone, sweet cheeks"?) only prove that I am right.

[-] -2 points by Theeighthpieceuv8 (-32) from Seven Sisters, Wales 1 year ago

That's a really insane opinion; even the poor themselves have been fleeing high taxes for like, forever.

[-] 1 points by repubsRtheprob (1209) 1 year ago

Support income equity. We MUST fight to have a fair tax system.

Agitate ALL politicians to pass tax increases on thewealthy, and tax cuts for the working class!!

Please sign the petition, Support the Buffet rule!!

http://www.tammybaldwin.com/petition/e1302br/

[-] 1 points by repubsRtheprob (1209) 1 year ago

More of a fact. Don't be afraid, we can raise taxes on the wealthy and they ain't gonna go anywhere.

[-] -2 points by Theeighthpieceuv8 (-32) from Seven Sisters, Wales 1 year ago

A government for the people should be focused on lowering taxes, not on raising them.

[-] 1 points by repubsRtheprob (1209) 1 year ago

Raise taxes on the wealthy, lower them for the rest of us. Thats what 99% of "the people" want.