As standard conservative belief goes, jurisdictions that tax the wealthy will always watch the richest flee to jurisdictions that conscientiously refuse to “tax the rich.” .Heritage Foundation's 'celebrity' Stephen Moore says Bezos saved more than $600 million in taxes on recent stock trades I was overjoyed Last week on social media: “More confirmation of how taxes influence relocation decisions!''
But analysts who actually go out of their way to study tax data find that while the right-wing is making a fuss about the foolishness of raising taxes on the wealthy, it's based on Bezos' windfall formula, which grossly distorts actual taxes. He points out that it is based on a relatively small number of well-known anecdotes. A rich story.
Sociologist Cristóbal Young points out in his 2017 book: The myth of millionaire tax avoidance: Location still matters for the wealthy. The view that the “freedom of movement'' enjoyed by our wealthiest people will always undermine any effort to collect more tax revenue from the wealthy has dominated the public debate over taxes, especially in states. “It's becoming more and more noticeable at the level,” Young said. But he insists that view in no way reflects “actual evidence.”
“Immigration overwhelmingly occurs when people are establishing their careers,” said Young, who is based at Cornell University. “At this advanced stage in their careers, people rarely move.”
What is the main reason why our amazingly wealthy lives remain the same? The wealthiest among us have “business and social connections that make them prominent and well-connected insiders in the places where they live.”
The numbers back up Young's claim. His research is based on data from “the tax returns of every $1 million earner in every U.S. state over a 13-year period,” totaling about 45 million tax records.he is also being analyzed forbes Using data on billionaires around the world, we investigate the tendency of economic elites to migrate outside their countries of origin.
“By the time people reach the peak of their careers and reach the highest tax brackets in their states and countries, many have become an embedded elite,” his research shows. “Places are obsessions. Once you're successful in a place, it's hard to leave.”
Other researchers have observed similar dynamics at play.
As Karl Davis of the Institute on Taxation and Economic Policy pointed out last fall, “Many state legislators overestimate how sensitive the wealthy are to differences of a few percentage points in state tax rates.” .
The difference in state tax rates for high-income earners can be much more than a few percentage points. Wealthy people in Florida, for example, may get a free pass at tax time, but those based in New York will face a 10.9 percent state tax rate on incomes above $25 million. People in that income bracket living in New York City would face an additional 3.876 percent tax on income above that level, making their total top tax rate 14.776 percent.
But the number of millionaires is actually increasing in New York state, a new report from the Fiscal Policy Institute finds. And about three-quarters of the rich people who left New York went to Connecticut, New Jersey, and other high-tax states.
What is the clearest evidence that our wealthiest people are not fleeing high-tax places en masse? The evidence comes from the luxury real estate market. In the fourth quarter of 2023, Mansion Global In New York City, sales of residential properties in the $20 million and above price range rose 9% annually, according to a report last month.
Total luxury home sales for the quarter were 530 million yen, a “significant 37.6 percent increase over last year's sales,” according to Cooley Napier, research director at real estate giant Serhant. It is said that it exceeded the US dollar.
Right-wing defenders of the wealthiest among us simply ignore statistics along this line. They continue to argue that taxes on the wealthy are too high in too many places.our actual Tax season reality: Taxes on our wealthy Nowhere It's running at a high enough level. Even in these jurisdictions that currently tax the wealthy at our nation's highest rates, our nation's wealthiest remain staggeringly wealthy after taxes.
And that causes serious problems for the rest of us. In trendy metropolitan areas, the wealthiest people are driving up real estate prices, making housing increasingly unaffordable for middle- and low-income households in the process. The same Fiscal Policy Institute study shows that the top 1 percent of New York state pays the highest tax rate. do not have Evicting these wealthy people means that the average household teeth More and more people are deciding that they can't afford this city and are leaving the city.
“In 2022, the most recent year of data was available.” new york times “The wealthiest New Yorkers left the state at much lower rates than all other income groups.”
We need to fine-tune our taxes on the wealthy. We need to do more than tax high income earners. you need to limit them.
Sam Pizzigati, an associate research fellow at the Institute for Policy Research, is co-editor of Inequality.org. His latest book includes maximum wage claim and The rich don't always win: The forgotten victory over plutocracy that created America's middle class, 1900-1970..