Taxes Don't Drive Out California Rich: Study
Source: CNBC
As Californians debate the "rich tax" contained in Gov. Jerry Brown's Prop 30, a new report challenges one argument for lowering tax rates on the wealthy: that millionaires simply move to avoid higher taxes, leaving the middle class with a higher burden.
The study, by sociologists at Stanford and Princeton, looked at two tax changes in California, a 1996 tax cut on high-income filers and a 2005 levy called the Mental Health Services Tax that took one percent of income over $1 million. Using tax-return data, the researchers examined how the changes affected "millionaire migration" in or out of the state before and after the tax laws were passed.
The research showed that millionaires not only were unmoved, so to speak, by their taxes being raised, "the highest-income Californians were less likely to leave the state after the millionaire tax was passed," wrote Charles Varner and Cristobal Young in their report.
In fact, the richer the Californian, the more likely he or she was to stay, the study found. Nor did the data suggest that lowering taxes lured millionaires to the state.
Read more: http://finance.yahoo.com/news/taxes-dont-drive-california-rich-194018632.html
