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Thursday, January 24, 2013

The Phil Mickelson effect: Do millionaires flee states with high taxes?

Popular golfer Phil Mickelson talked about needing to make major changes because of tax increases, including possibly retiring.

He has since clarified and said he should not have spoken publicly about his tax situation.

He can leave California if he likes. How often do rich people leave a state because of taxes?

From the piece:

Studies paint an inconclusive picture.

One, released in November by Stanford Center on Poverty and Inequality, finds no significant evidence of millionaires fleeing a state when their state tax rate rises. " 'Millionaire migration' is simply a myth," it states.

Another, released in 2011 by the New Jersey Treasury Department, found that higher tax rates had an effect on migration, though not enough to offset the revenue gains from the higher taxes. But migration losses "would cumulate over time," it concluded. "Our analysis of the New Jersey 2004 'millionaires’ tax' suggests that over time migration effects could offset a meaningful share of the revenue boost."

 

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