Raise taxes and watch 'em scatter. That's the gist of the argument against all kinds of usury-hikes. And it's one you'll hear often from conservative groups in Washington this year, thanks to Bill Gates Sr.'s I-1098, an initiative that would make the country's most regressive tax system more pro- by instituting an income tax on high-earning families while cutting those for property and small business. Sound good? Well it'll sound even better when you find out that, most of the time, rich people stick around even when you ask them for a little more coin.
HorseAss points outthis post from The Center on Budget and Policy Priorities entitled "If you tax them, will they flee?"
As Ezra Klein's research desk explains, most studies show that rich people don't flee higher-tax states for lower-tax ones and "the revenue generated by state tax increases on high earners overwhelms that lost from taxpayers' leaving." ... In fact, raising taxes on the highest-income households -- a group that's enjoyed the greatest rise in incomes and the greatest decline in taxes in recent decades -- is a sensible and effective way for states to help offset the huge drop in revenues during the recession.
Tax rates just aren't a big part of most people's decisions about where to live -- though that doesn't stop some opponents of raising taxes on the wealthy from stringing together a few anecdotes in hopes that the rest of us will believe millionaires are in full flight from states that have called on them to pay their fair share.
[...] Perhaps the most definitive study, by Princeton University researchers, found that after New Jersey increased taxes on those making over $500,000, it experienced a yearly revenue loss of about $38 million because of those who left -- but a gain of more than $1 billion from those who stayed.
So not only will we get to keep our rich folk, but we'll get to keep some social services -- that they benefit from too, don't forget -- as well? This year, Christmas comes in November! Hooray!