A new study from the Center on Wealth and Philanthropy at Boston College reports New Jersey lost $70 billion in wealth between 2004 and 2008, as high net worth individuals left for more hospitable tax states such as Florida and Pennsylvania.
The study found that in the four years prior (which happens to be before hikes in the income and sales tax went into effect), the state had a net in-migration of $98 billion.
“The wealth is not being replaced,” said John Havens, who directed the study. “It’s above and beyond the general trend that is affecting the rest of the northeast.”
The 32-page study is available at this link. It is part of a continually-growing body of research that empirically proves what has been self-evident to free market thinkers - taxes are a price and therefore factored into an individual's decision matrix. In modern times with ease of transportation, high tax rates will force greater numbers of people to lower-tax destinations. That is especially true when a narrow slice of the population is expected to pay for the overwhelming majority government services. Eventually, those who are the most heavily taxed will flee.
This has impacts on job creation, tax collections, philanthropy and economic opportunity. It is also why calls for the state to extend last year's income tax hike are short-sighted and ultimately self-destructive.
Comments