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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

Taxes go up, the wealthy move out

Taxes


During December 2007, I blogged “Taxes Go Up, People Move Out.” It read, in part:

Wisconsin’s high level of taxation is forcing too many residents to pack up and leave. New data indicates the disturbing trend continues, having a damaging effect on our ability to compete.
During the five years prior to the 2000 census, almost 669,000 people either moved to or out of Wisconsin. However, the net in-migration into Wisconsin was a meager 7,282.

Individuals with college or advanced degrees were more likely to leave, while those with less education tended to come. Individuals with household incomes above $75,000 left Wisconsin. Those with incomes of $200,000 or more had the highest rates of leaving.

The huge exodus of wealthy Wisconsinites leaving the state caused a loss of an estimated $4.72 billion in net worth and a loss of $455 million in income over the five years of this study. That means far fewer in-state bank deposits, less stock in Wisconsin firms, less investment capital for in-state ventures, and less money given to local charities.

We are losing our best and brightest at a very young age, and we're experiencing retiree flight.”

There is new evidence that taxes are a serious factor considered by the affluent in choosing where to live. Using data from the Federal Reserve’s Survey on Consumer Finances, the Census Bureau and the Internal Revenue Service. the Center on Wealth and Philanthropy at Boston College found that wealthy residents I New Jersey were leaving the high-taxed state for places like Florida, Pennsylvania, and new York. New York also has high taxes, however their levies are not as high as those in New Jersey.

Here are some of the study’s key findings:

 

 

  • From 1999 through 2003, there was a net influx of $98 billion (in 2009 dollars) in household wealth and concomitant net increase of $881 million in charitable capacity.

 

  • Most of the wealthy in-migrants came from the states of New York and Pennsylvania and from foreign countries.

 

  • In the subsequent five years from 2004 through 2008, New Jersey experienced a near total reversal of the flow. The inflow of wealth dropped from $300 billion to $117 billion – a difference of $183 billion. There was a total decline in wealth during that period of $168 billion.

 

  • As a result of the wealth flow reversal New Jersey lost a total of $2 billion in expected giving or in charitable capacity.

 

  • The out-migration of more affluent and wealthy households rose while the out migration of less wealthy households was reduced.


Lower taxes mean more people are working and earning salaries, so states and the federal government see increased revenues. The “tax the rich” concept only serves to drive the wealthy to other states, taking with them their ability to invest, create jobs, and contribute to worthwhile charities.


Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University told the Newark Star-Ledger that unless dramatic changes are made in New Jersey’s tax system, “We’ll probably see a continuation of the trend, until there are no more high-wealth individuals left.”

Read the study here and more from the Newark Star-Ledger.

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