Millionaire Migration and State Taxation of Top Incomes: Evidence from a Natural Experiment
نویسندگان
چکیده
This paper examines the migration response to a millionaire tax in New Jersey, which raised its income tax rate on top earners by 2.6 percentage points to 8.97 percent, one of the highest tax rates in the country. Drawing on unique state tax micro-data, we estimate the migration response of millionaires to the rate increase, using a difference-in-differences estimation strategy. The results indicate little responsiveness, with semi-elasticities generally below 0.1. Tax-induced migration is estimated to be higher among people of retirement age, people living on investment income rather than wages, and people who work (and pay tax) entirely in-state. The tax is estimated to raise $1 billion per year and modestly reduce income inequality.
منابع مشابه
Migration and optimal income taxes.
The issue addressed in this paper is the optimal taxation of incomes earned tn the home economy, and of incomes earned abroad, when people can migrate. As a preliminary, the optimal taxation of home incomes when there is migration and no taxation of foreign incomes, is discussed. Then in a more general setting, we deal with optimal taxation of different kinds of labour when another kind of labo...
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