Study: NJ tax didn't make millionaires move away

Though many individuals against taxing the wealthy argue that the impact will cause millionaires to move away from their states, according to a recent study in the National Tax Journal, this has not occurred in New Jersey.

In 2004, New Jersey legislators imposed a tax on individuals who earned $500,000 or more per year. Their tax rates increased from 6.37 percent to 8.97 percent.

Researchers Cristobal Young from Stanford and Charles Varner from Princeton compared the movement of millionaires from New Jersey before and after the imposition of the tax, to see if, as many tax opposers suggest, the new tax resulted in a flight of millionaires from the state.

Rather than showing a dip in the number of millionaires in the state following the new tax, researchers say they found that the presence of individuals with incomes above $500,000 actually increased.

Additionally, the researchers decided to compare movement trends with individuals who made a significant amount of money, but were not impacted by the tax. When the movement was compared with that of people making between $200,000 and $500,000 they realized that the rates of individuals leaving the state for both groups were nearly identical and "the policy effect is close to zero," the study said.

Though this study found the wealthy are not moving due to high taxes, a number of sources report an increasing number of middle-class individuals are considering moving to states with lower income, sales and property taxes in order to save money. 

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