All the gnashing of teeth and tearing of breasts about “the most productive members of our society” voting with their feet and abandoning our state if we institute an income tax has always seemed a little … overblown.
Turns out it is. If it was true, you’d expect to find a much smaller percentage of millionaires in places that have (high) income taxes.
But you don’t:
The red line is the “trend,” showing the correlation between the two variables. That correlation is vanishingly small: .00003. Yes that’s four zeros.
Notice in particular the blank area the size of Siberia in the lower right, where you should be finding lots of millionaires scurrying to avoid income taxes. Hmm.
You do see New Hampshire and Sarah Palin’s Socialist Utopia of Alaska down sort of over there, but that just tells me that some subset of millionaires seems to like … cold places.
Of the 12 states with the highest concentration of millionaires, 10 (83%) have above- or at-trend (in this case, median) income tax rates.
Many thanks for the effective tax rate data to Eric de Place of Sightline Daily, who did the yeoman’s work of compiling it based on the wonderfully detailed but rather unwieldy Tax Foundation data (XLS).
Millionaires percentage: Phoenix Affluent Marketing (PDF).
Comments
5 responses to “1098: If Millionaires Vote With Their Feet, They Apparently Don’t Care About Income Taxes”
[…] Steve Roth at Asymptosis uses data compiled by Eric de Place of Sightline about where millionaires live, and it turns out […]
This is more of a “snapshot” in time… you can draw a lot of conclusions from it.
It’s quite possible that “existing” millionaires are moving out of high-tax regions, but also that high-tax regions are places that have a higher probability of creating NEW millionaires. Not sure why the latter would have a co-relation: possibly high taxes means more spending on education, smarter workers, more innovation, etc.
To make sense of this data, we probably need more info:
1) the rate at which new millionaires are created in each state
2) the rate at which existing — but not retired — millionaires move out of state
@bex
True this doesn’t reveal the dynamics. But you still gotta wonder:
Why aren’t the low-taxing states at the bottom father to the right — with more millionaires?
Why aren’t the high-taxing states at the top farther to the left — with less millionaires?
You just can’t ignore the fact that the lower right corner is *completely unpopulated.*
[…] the 12 states with the highest concentration of millionaires, 10 (83%) have above- or at-trend (in this case, median) income tax […]
[…] of years ago (with Bill Gates Senior as the lead spokesman and cheerleader; it failed dismally), I got curious to know whether millionaires do actually congregate in low-tax […]