Taxes and Intestate Migration PCBE税和州际迁移PCBE.pptVIP

Taxes and Interstate Migration New Jersey Department of the Treasury Office of the Chief Economist Office of Revenue and Economic Analysis The New Jersey Tax Flight Controversy In 2004 New Jersey sharply increased its highest tax rates: Marginal rate on income over $500,000 was boosted from 6.37% to 8.97%. Hughes and Seneca (2007) first documented increased outmigration from New Jersey. Havens (2010) documented large unfavorable shift in wealth movements from New Jersey than from neighboring states. Young and Varner (2011) document outmigration rise at upper end, but Regard loss of tax base as very small relative to revenue gain Argue that tax increase had little or nothing to do with outmigration Assert high home prices in New Jersey may have spurred outmigration of the well-to-do. * Net Migration from New Jersey * Taking another look at the issue Young and Varner Only considered taxes and outmigration, not taxes and inmigration (did not consider individuals who did not move to New Jersey as a result of the tax change) Only looked at New Jersey Assumed that 2004 tax hike had no implications on migration patterns of individuals not immediately affected. Essentially looked at direct effect on individual migration decisions, and did not take into account expectational and other indirect effects on the rest of the population. Did not systematically look at the influence of housing costs * Study of Interstate Migration Started with the IRS migration dataset. This series presents annual state-to-state movements of taxpayers and adjusted gross income. Assumed migrations are influenced by Differences in unemployment rates (people likely move from high-unemployment rate to low-unemployment rate states) Differences in home prices (people likely move from high-home price to low home-price states) Differences in state income taxes (people likely move from high-tax to low-tax states, especially to those with no state income tax) * Results Statistically significant effec