Moving Decisions
Research is mixed as to how much tax policy influences behavior, Seneca said. Other factors influence moving decisions such as weather, employment opportunities, children’s education and being closer to family and friends, he said.
A 2011 paper by Cristobal Young of Stanford University and Charles Varner at Princeton University found that New Jersey’s higher taxes for top earners had little effect on migration.
A report the next year co-authored by Charles Steindel, the chief economist of the state’s Treasury Department, had different results. It estimated the state lost 18,000 taxpayers and $2.4 billion in annual income from 2003 through 2010 after tax increases for top earners.
“If you raise taxes you’re likely to lose some people,” Steindel said. “It’s something that adds up over time.”
France to Russia
While most people won’t go as far as the actor Depardieu -- who got citizenship in Russia last month to avoid higher taxes in France -- more people may make changes because of the multiple increases targeting high earners, said Montgomery of Canterbury Consulting.
John Franson, a 42-year-old financial analyst in Boston, said he and his wife wouldn’t mind paying a little bit more if they saw lawmakers put a constructive plan in place to reduce the budget deficit.
“We don’t see that,” he said. “We see class warfare. We see the finger pointing that the top 1 percent caused all the problems.”
The couple will pay a top marginal rate of more than 51 percent this year, with federal and state taxes combined, Franson said. He said he’s going to cut back on donations because he’ll have less disposable income and he expects more increases.