The Phil Mickelson effect: Do millionaires flee states with high taxes? (+video)
Golfer Phil Mickelson said he might move to Florida after California raised tax rates on the wealthy. Studies looking into tax flight have come to mixed conclusions.
The question of whether millionaires move to other states to avoid taxes is being asked afresh here in California after golfer Phil Mickelson, the world’s seventh-richest athlete, said he may move to Florida. A new state tax hike touted by Gov. Jerry Brown (D) will push his total state and federal tax rate to over 60 percent.
Republicans are lining up to say, “I told you so.”
"Sixty percent of your income? I don't think so," said state Assembly Republican leader Connie Conway. "The man has a family. He has a business to run. He is a business. Sixty percent of income goes way beyond fair share.”
She told the Associated Press that Mr. Mickelson’s exit “will be the first of many.”
Studies paint an inconclusive picture.
One, released in November by Stanford Center on Poverty and Inequality, finds no significant evidence of millionaires fleeing a state when their state tax rate rises. " 'Millionaire migration' is simply a myth," it states.
Another, released in 2011 by the New Jersey Treasury Department, found that higher tax rates had an effect on migration, though not enough to offset the revenue gains from the higher taxes. But migration losses "would cumulate over time," it concluded. "Our analysis of the New Jersey 2004 'millionaires’ tax' suggests that over time migration effects could offset a meaningful share of the revenue boost."