By Bob Plain in
RIFuture.org
Can we finally put to rest the false idea that the rich will
leave Rhode Island if the state raises taxes? The Earls aren’t fleeing the
Ocean State, they flock here. We’ve got the best beaches and we treat our rich
like they are royalty.
And even if we only had the best beaches, the New York Times this weekend threw more cold water on the tired old
talking point that there will be a wealth exodus if we make the
affluent pay their fair share.
It’s an article of faith among low-tax advocates that income tax
increases aimed at the rich simply drive them away … That, at least, is what
low-tax advocates want us to think, and on its face, it seems to make sense.
But it’s not the case. 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.
From 2005 to 2011, California lost 158 people with household
incomes under $20,000 for every 100 who arrived, and 165 for every 100 people
with household incomes between $20,000 and $40,000. In contrast, just slightly
more people with household incomes in the $100,000-$200,000 range left than
came to California (103 out per 100 in), and California actually gained a hair
more people in the $200,000+ range than it lost (99 out per 100 in). The rich
aren’t leaving California, but the poor and the middle class are.
Bob Plain is the editor/publisher of
Rhode Island's Future. Previously, he's worked as a reporter for several
different news organizations both in Rhode Island and across the country.
