27 February 2013

Tax Flight

The notion of tax flight “is almost entirely bogus — it’s a myth,” said Jon Shure, director of state fiscal studies at the Center on Budget and Policy Priorities, a nonprofit research group in Washington. “The anecdotal coverage makes it seem like people are leaving in droves because of high taxes. They’re not. There are a lot of low-tax states, and you don’t see millionaires flocking there.”

And yet, increasing nominal tax rates doesn’t always lead to revenue increases, and often leads to decreases.  So maybe the lesson to be learned is that “tax flight” doesn’t refer to people leaving, but to capital leaving.  Or maybe the official statistics are just lies propagated by conservatives and libertarians who, as we all know, control the federal government and mainstream media.