The Millionaire Migration Myth

There’s been a lot of talk lately about the supposed effects of reinstating Maryland’s millionaire tax, as the Governor tries to figure out how to plug the $1 billion budget deficit in next year's budget. Some opponents are still stuck repeating the myth that millionaires will flee the state in droves (even though analysis of tax returns during the previous millionaire's tax of 2008-2010 shows that isn’t true). Others argue that Maryland’s overall tax structure is pushing high-earners out. One wonders how to reconcile this with the fact that Maryland continues to have the highest concentration of millionaires in the country? In fact, the tax return analysis linked above shows that Maryland added 3,118 millionaires to the tax rolls in 2008 and 2009, almost four times as many as those who died or left the state during the same period.

In reality, migration is uncommon at all income levels, and mostly driven by non-tax factors. Instead, most households move for three reasons: to find cheaper housing, to take advantage of job opportunities, and to move to a better climate. While we can’t control the weather, the governor and General Assembly should push a budget and legislation that promotes affordable housing and better jobs. This will require new sources of revenue, of which the millionaire’s tax should be a part.

The bottom line is that when Maryland raises taxes it gains significant revenue for schools, transportation, public safety, and all the other services and amenities that create jobs, strengthen our economy, and make Maryland an attractive place to raise a family.