February 18, 2013 2 Comments
So, a while back, in reference to Phil Mickelson’s whine about being over-taxed in California, I wrote:
If I made $47 million a years I would simply live where I wanted to live, damn it. If I loved the Pacific ocean, Los Angeles, and Hollywood, I’d live in California even it it costs me $10 million more a year. Do you really feel it when you make that much? Or, if I loved Disney and the Atlantic and hanging with Lebron, I’d move to Florida. As most residents of the Triangle know, location really does matter for quality of life. If money is no object (which it shouldn’t be for a multi-millionaire) why in the world wouldn’t you just live in the place with the best (subjective) quality of life?! Presumably, to this point Mickelson has decided that this place is California. For a man in his financial position, it literally makes no sense to move somewhere else over 3% of his income.
Well, then, how nice to see a piece in the Times emphasizing that no, most rich people are not as greedy and short-sighted as Phil Mickelson suggests he is:
It turns out that a large majority of people move for far more compelling reasons, like jobs, the cost of housing, family ties or a warmer climate. At least three recent academic studies have demonstrated that the number of people who move for tax reasons is negligible, even among the wealthy.
Cristobal Young, an assistant professor of sociology at Stanford, studied the effects of recent tax increases in New Jersey and California.
“It’s very clear that, over all, modest changes in top tax rates do not affect millionaire migration,” he told me this week. “Neither tax increases nor tax cuts on the rich have affected their migration rates.”
The notion of tax flight “is almost entirely bogus — it’s a myth,” said Jon Shure, director of state fiscal studies at the Center on Budget and Policy Priorities, a nonprofit research group in Washington. “The anecdotal coverage makes it seem like people are leaving in droves because of high taxes. They’re not. There are a lot of low-tax states, and you don’t see millionaires flocking there.”
Not that this never happens, but certainly not enough that it should be a major public policy concern. And I’ll reiterate that some super-rich person who’s going to choose his/her residence over an amount of money they won’t even feel instead of all the other far superior reasons, just shows you don’t have to be smart to be rich.