If a recent report authored by Arthur Laffer, Stephen Moore and Jonathan Williams is accurate, New York and California will lose a combined 800,000 residents over the next three years. The trio also predict that other high-tax states like Connecticut, New Jersey and Minnesota will see 500,000 of their residents move elsewhere.

Many will be high-income citizens, driven to relocate by the recent tax law capping the limit on their state and local tax deductions to $10,000 per family, they argue. In the past, high earners in states where the income tax was in the 8 to 10 percent area were able to reduce the effective tax by one-third—or export the tax burden to other states, as Laffer and Moore put it—when they deducted those taxes from their federal returns.

Others see it very differently. From the vantage point of many, including the late New York Senator Daniel Patrick Moynihan, blue states like New York and California send $1.40 or $1.50 to Washington for every dollar they receive back from the federal government. But taken a step further, it makes sense for all taxpayers to locate many government operations like military bases in states where costs are lower.

Wherever you live, however, Laffer and Moore, who penned an article in today's Wall Street Journal, have a point. As a New Jersey resident, I personally know quite a few people talking about leaving the state, though many are not high-income individuals. Factors like job opportunities are more important for most Americans than state income and local property tax rates.

What may be a better indicator of how affluent residents of New York and New Jersey are thinking is the direction of real estate prices. Most arrows are pointed down across a vast swath of upper middle-class properties in the greater NYC-Tri-state area.

In an interview earlier this month, market strategist and economist Ed Yardeni said he would not be surprised if New York, Connecticut and New Jersey had their own rolling recessions, largely due to the reasons cited by Laffer and Moore. If 800,000 high-income really moved out of a handful of expensive, high-tax states, they probably would see economic downturns.

The folks Laffer and Moore are obsessed with are earning more than $1 million annually. Small in number, they provide a disproportionate share of their states’ tax revenues—it has been estimated that if the 5,000 highest-earning Californians packed their bags, the Golden state millionaire's tax woul turn revenue-negative.

However, many of these people have jobs and businesses that their incomes may be chained to. Giant businesses like Pimco and Google (where the median income is $200,000) may be transferring certain operations to enclaves like Austin, Texas and Boulder, Colo., but they still maintain headquarters in California.

What comes around goes around and there may be other factors at play in national migration patterns. New York, California and other urbanized areas have enjoyed strong rebounds since 2009, during what has otherwise been a slow expansion, particularly in the Midwest and numerous rural areas.

Surging living expenses, especially affordable housing costs, are now driving young families in relatively low tax brackets out of places like New York and San Francisco overpopulated by wealthy foreigners and venturists seeking to hit the big time. That is a real problem in its own right, but a very different one than the purported exodus of million-dollar earners.

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