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