More dirt in the grave of the tax flight myth

Public Assets Institute has said for years that there’s no economic evidence for the idea that the wealthy are leaving Vermont because of high taxes—or that higher taxes would send them off in droves, to the detriment of the state’s finances.

We’ve pointed—as has Vermont’s Blue Ribbon Tax Structure Commission—to IRS data showing that people moving into Vermont have higher incomes than those who leave.  This was true even in the 1990s when state income tax rates were higher than they are now.

And earlier this month, we released a 50-state study by University of Massachusetts economist Jeffrey Thompson that comes to an even stronger conclusion:  Taxes have no measureable impact on people’s decision to leave a state.

Today, National Public Radio’s Planet Money interviews Thompson and throws more dirt into what we hope will be the grave of the myth that taxes cause flight. NPR reports on yet another new study, by two sociologists at Princeton and Stanford, looking at migration patterns in New Jersey before and after passage of that state’s “millionaires tax” in 2004.  Guess what? Most millionaires stayed put.  And whatever revenue the state lost from those who did move was more than offset by the additional taxes.