MASSACHUSETTS LEGISLATORS APPROVED the so-called Fair Share Amendment last week, setting the stage for it to appear on the 2018 statewide ballot, where voters will decide whether to impose a “millionaire’s tax” on top income-earners to fund transportation and education.
Critics will undoubtedly raise one important question: If the state passes this tax, will large numbers of millionaires move away?
Big data can answer this question, since Massachusetts is not the first to have a tax on very high incomes. And federal income tax data contains a virtual census of America’s millionaires, showing where they live and where they move. Are millionaires highly mobile? Do they tend to move from high-tax to low-tax states?
I have studied these issues for years, working with a colleague at Stanford University and with researchers at the US Department of Treasury. We analyzed the (de-identified) tax returns of every million-dollar income earner in the United States over 13 years.
Here’s the bottom line: Overall, millionaires are deeply embedded in place.