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Not many flee because of taxes…Dow Jones gets real

by Linda Beale

Dow Jones video admits there’s not much other than anecdotal tales that even millionaires readily move from one state to another to avoid taxes

OK.  Admittedly long title.  But you get the point.  The anti-tax gurus are forever saying that states (and countries) can’t increase taxes from our historically very low point because those that would pay them are the rich and the rich have the means of moving away.

But do they?  There are lots of things that come into whether one is willing to move or not–from weather to family to friends to business to custom to, yes maybe, taxes.   So if a gazillioinaire moves to another state and then is asked–did you do it to save on taxes?, he might say yes (he knows his views may influence policy inordinately) but it might not even have been a factor or it might have been a minor factor or it might even in unusual circumstances have been the primary factor.

So it’s good to see a Dow Jones/Wall Street Journal video that admits that is the case.  Not unsurprisingly (since it is, after all, a Wall Street Journal video) the title is “millionaires fleeing taxes” (Aug. 27, 2012), and the blurb underneath states (as though it were fact) “when states raise taxes, millionaires move out”.  But that isn’t really what the video interview says.

The video admits that there are no good studies that show that millionaires actually move from one state to another because of tax increases.

Yeah, elderly wealthy move to Florida, but that isn’t necessarily to avoid taxes and in fact may well not be related to taxes at all.  Yeah, there are anecdotal stories that people move because of taxes, but there’s no real proof.  The video acknowledges that there are many other reasons for choosing where to have one’s primary residence, and that manipulation of residence can create problems.  As the video says, “You can show residency in a state by living there a certain amount of time. …. You have to be very very careful, though.  States are being very aggressive about collecting from everybody and determining who actually lives there.”

cross posted with ataxingmatter

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And Here I Thought Corporations were Rational

Ken Houghton lowers the level of discourse at AB by discussing the career of a porn star other than Adam West.

One of the primary tenets of economic theory is that corporations believe in nothing other than profits. Well, it’s not quite that stark—we use phrases such as “utility maximization,” “cost minimization,” and the like—but the basic idea is that corporations, even more than individuals (silly humans!), have as their sole target maximizing profits.

So I’m a bit confused by the Vancouver Sun’s poorly-edited* obituary for Marilyn Chambers.

Let’s put the timeline together:

  1. Chambers “began her onscreen career as an Ivory Snow detergent model.”
  2. Chambers made Behind the Green Door, released in 1972.
  3. The movie “prompted a run on boxes of Ivory Snow, which featured a photo of Chambers.”

    So far I follow this: actress tries a different role, reaches a whole new audience, and sales of her previous works soar. (Think Kristin Chenoweth going from Broadway to television. Or maybe not.) What I don’t understand is the reaction:

  4. [T]he scandal produced “a Marilyn Chambers clause in all modeling contracts, saying that you can never have posed topless or nude or been in any kind of adult film or Playboy or anything like that.”

Let’s review. MKarilyn Chambers (h/t Tony C.) causes a major spike in sales of Ivory Snow detergent. Better yet, some of those people probably aren’t even going to open the box, so they’re going to have to buy another detergent as well—and, even time they have to go shopping, they’re going to see that Ivory Snow detergent and, if they need detergent, they’ll have an identification with it.

UPDATE: Robert, in comments, notes that this may be a rational act, if we assume normal market segmentation and a lack of loyalty on the part of the spurt of buying.

I believe this is what economists refer to as a “win-win” situation.

So why would the result be a “business decision” specifically banning the possibility of developing such cross-marketing potential in the future?

*I say poorly edited because on things such as that the last sentence of paragraph three is “The L.A. County coroner is examining the cause of death, but a spokesman said foul play is not suspected.” and the closing of paragraph four is “The cause of death is under investigation but foul play was not suspected and an autopsy is pending,” which strikes as the equivalent of giving the reader a sense of deja vu through stereotomy glasses.

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