The Phil Mickelson effect: Do millionaires flee states with high taxes? (+video)
"Additionally, out-migration associated with higher income taxes will likely diminish other streams of state revenue, such as corporate tax, sales tax, and property tax, as well as degrade a state’s overall economic performance, in turn associated with further out-migration," the authors wrote.
The issue is a politically sensitive one for California. In November, state voters passed Proposition 30, which raises tax rates 1 to 3 percent for those making more than $250,000 a year. The initiative is integral to California's new budget, which shows a surplus. But along with Washington's "fiscal cliff" solution – which also will raise taxes on the rich – there are questions about how California's millionaires will respond.
“If there is anything that can be termed a mass exodus, then I think that will be symbolically very important,” says Jessica Levinson, former political reform director for the Center for Governmental Studies.
Experts acknowledge that any migration effect is hard to gauge.
The question is more complex than many make it out to be, says Michael Shires, associate professor of public policy at Pepperdine University.
“The question of whether the wealthy are leaving or will leave California is a tough one,” he says. “There is clearly a lot of anecdotal evidence of this shift – all of us know people who say they are doing it."
For those like Mickelson, who can take their game and live elsewhere, it is quite easy to move. “But for the many affluent Californians whose wealth is dependent on California-based enterprises, moving out of state does not relieve them of their tax burden, so there is less impetus to do so,” he adds.