The Millionaire Migration Myth: Why a Fair, Graduated Rate Income Tax Won’t Drive Away Millionaires
March 28, 2014
This Issue Brief examines several studies done on the migration response of millionaires after a state levies a “millionaire’s tax.” Proposals to change Illinois’ constitution from requiring the state to impose a flat income tax to allowing a graduated rate structure have been attacked on the grounds that imposing higher rates on higher levels of income — and particularly on income above $1 million —punishes success and ultimately will drive millionaires out of the state causing economic harm. As it turns out, however, the overwhelming body of evidence shows that these attacks have no merit. Drawing on reports released by Stanford University and the Center on Budget and Policy Priorities, this Issue Brief debunks the myth that if Illinois increased income tax rates on higher incomes there would be a mass exodus of millionaire households out of the state and points out the importance of moving to a fair tax.