Maryland Millionaires Didn't Migrate

People decide to locate or stay in Maryland mainly because of their jobs, their families and their community ties. The cost of housing is also important. Tax rates are not a big factor. This applies to poor people, rich people, and middle-income people.

A new report from the Center on Budget and Policy Priorities examines the assertion of anti-tax groups that tax increases on very-high incomes drive millionaires to leave for other states.

That claim is false.

The study looked at the academic literature on migration and at specific data and research in Maryland, Oregon and New Jersey.

In each case no more than a trivial amount of migration can be tied to the tax increases. The study concludes: "...the effects of tax increases on migration are, at most, small. In other words: raising taxes won't spark a large wave of out-migration, and cutting taxes won't spark a large wave of in-migration.

For 2008 through 2010, Maryland imposed an extra 3/4 of 1% state tax rate on income over $1 million. (For a total state tax rate of 6.25% on income in that bracket). That policy provided $170 million during the three years to help balance the state's budget.

What WILL be harmful to Maryland's economy now, is deep cuts to education, the transportation infrastructure, heath services, job training, and the other public assets that taxes pay for. Maryland should re-instate the 3/4 of 1% extra tax on income over $1 million. The millionaires will continue to live here, and more will come to employ our well-educated workforce and take part in our great quality of life.