Millionaires don't flee high
WASHINGTON People who earn at least $1 millionannually don't move away from high tax states such as New York, New Jersey and California any more frequently than does the general population, a new study says.
Many of the nation's highest earners are "the working rich,'' such as lawyers, physicians, corporate managers and financiers, whoearn a livingnear where they currently live, according to the study.
Their study found that each year, about 500,000 households file returns reporting at least $1 million in income. Of those households,only about 12,000 change their state of residency annually.
That's a migration rate of 2.4%, which is slightly lower than the national average of 2.9%. In fact, the people most likely to leave a state are those earning $10,000 or less annually.
The study also looked at people who earned $1 million overmultiple years as opposed to those who did it only once. It found that these "persistent millionaires'' were even less likely to move (3.2% for one timers vs. 1.9% for persistent millionaires).
The findings runs counter to arguments made by some politicians that raising taxes on the wealthy wage earners at the state level causes many to move to another state. It's been a long running debate in New York, where a temporary millionaires' income tax established during nike pros the 2009 state fiscal crisis has been extended through the end of 2017.
Billionaire Tom Golisano, a three time candidate for New York governor, was so unhappy with the tax that hechanged his officialresidency to Florida in 2009in protest. Florida hasno state income tax.
Golisano kept his 38 acre estate in the Rochester suburb of Mendon, where nike uptempo he still lives part of the year, and changed his official residency to a house he already owned in Florida.
The switch saved him $5 million in annual state income taxes, according to a column he wrote in the New York Post at the time. Golisano made his fortune as the founder of payroll firmPaychex Inc.
In New Jersey,Gov. "They more often have family responsibilities spouses and school age children that embed them in place. They own businesses that tie them to place. And their elite income itself embeds them in place: millionaires are not searching for economic nike 180 air opportunity they have found it.''
In addition to New York, California and the District of Columbia have top tax brackets that apply to incomes over $1 million. New Jersey and Connecticut have top brackets for high income earners that starts at $500,000.
According to the Tax Foundation, 43states levy individual income taxes, with 41 taxing wage and salary income. New Hampshire and Tennessee only tax dividend and interest income.
Seven states, including Florida and Texas, have no income tax.
Supporters of the millionaires' tax argue that, where it doesn't exist,the wealthy pay a smaller share of their income than do middle and lower income families.
New York's Fiscal Policy Institute, a liberal leaning think tank, estimates that New York households earning under $100,000 pay state and local tax rates of 10.4% 12% while the wealthiest 1% pay an average of only 8.1%.
Ron Deutsch, the institute's executive director, said the new study "validates everything that we have been saying for a long time that there's this myth out there that conservativegroups tend to perpetuate every time someone talks about having the wealthy pay their fair share in taxes.''
Deutsch's group wants New York to increase tax rates on the wealthy,beginning with a 7.65% rate for households making $665,000. The increased rate would top out at9.99%.
The current top income tax rate in New York is 8.82% on singles earning $1.07 million and couples earning $2.14 million, which generates about $3.7 billion annually for the state.
About36,400 New York households reported incomes of $1 million or more in 2013, the most recent year available, according to the state Department of Financial Services.
Many states with income taxes have a top bracket that starts at a much lower income level.
"They are rooted to an extent, but they also can be mobile,'' he said. "It depends on the size and timing of (tax) increases.''
The years covered by the study includethe period when the Bush tax cuts were enacted. For many wealthy Americans, those cutswould have offset increases in state income taxes, McMahon noted, and would have reduced high earners' incentive to move.