Comment by thinkingtoilet 4 days ago
The answer is just no. Massachusetts passed a tax on income over a million dollars and despite the ads that were obvious lies, we have more millionaires now than we did a few years ago. Turns out, rich people like to live in places that have well funded infrastructure, good schools, a thriving art scene, etc...
95% on what? Income over a million dollars. Income over 10 million dollars? If you like living in a super liberal state and super liberal city like Boston, you're not going to move to Texas just because you're getting taxed higher. Rich people are still absurdly rich, I feel like that gets lost in these discussions. These taxes don't materially effect them in anyway but have massive benefits for society.
Rich people tend to actually be penny pinchers in my experience and most will object to 95% income tax out of principle.
You could say "well good riddance" but taxing $10mn of income at 20% raises a lot more useful money than taxing $0 of income at 95%
To be brutal about it the question isn't a how many more millionaires. Say Massachusetts has 10 new millionaires. That's great. What if Florida has 1000 new millionaires? Suddenly 10 doesn't sound great.
To my mind it's a revenue maximizing question. Is Massachusetts hitting that metric right? I have no clue. I do suspect that the voters and the people advocating taxes like this in Massachusetts and California are not thinking in those terms. I think they are doing this out of some sense that anyone making that much has to be doing something unfair and that an inefficiency in revenue is just money spent towards fixing that unfairness.
It has dramatically increased revenue, more than expected. Also, if you're the type of person who thinks you shouldn't pay your fair share, feel free to move somewhere else. We have the best schools in the country. We have a strong social safety net. We have a high quality of life. Shit, we live longer than almost any other state. So please, if that's not your thing, take your money and leave immediately.
The correlation between higher state and local taxes (beyond some reasonable baseline) and improved public service is tenuous at best in much of the US.
I'm happy to concede Massachusetts may very well have found the right balance, but there's plenty of studies on this in aggregate.
There's unsurprisingly a modest but statistically significant migration of millionaires from high-tax to low-tax jurisdictions.
https://www.asanet.org/wp-content/uploads/attach/journals/ju...
Yep people will pay rates in "high tax" US states where you're still only paying ~40% ish total income tax and they're really nice places to live.
That would still be considered a fair and reasonable level of tax by european standards.
Obviously there is a level though - if you made it 95% then people would leave. I don't think there's any reasonable argument that the level doesn't exist, the question is where is it for a specific place at a specific time