I guess that’s possible, but I’m imagining they had a state of filing for each household and an income and screened it that way for those that moved. Otherwise if you were just looking at the aggregate size of the “young high earners” demographic you might be picking up on economic conditions, good job creation or deterioration, etc, as well as moving.
The author does give an email if you’re curious, so I guess you could ask them. The migration trends are clear for people moving though, from many sources, away from high tax states and obviously rich people can move more easily than the middle class or poor (partly costs, partly they’re jobs are often more portable), so I’m pretty sure the conclusion is true but it’d be good to know if the data supported that.
Would the IRS be allowed to release to third parties private information (AGIs connected to specific SSNs for 2021 and 2022) on specific household incomes without obtaining a Form 8821 for each of them?
If so what would prevent a “study” to be so targeted that you could guess who they’re talking about (think Trump or the wealthiest people in the US)? Say a study to find out how much taxes were owed by people who filed returns in the states of NY and FL who are 78 years old with incomes over $50M mostly tied to real estate…
But anyway, that was my concern that if the study was done in an aggregate manner, then there could be have all kinda of effects other than migration also showing up in the data.
Well they released them all to ProPublica to do hit jobs on the Evil Rich ahead of midterms, so maybe they just got the data from them? I’m sorry, a well paid democratic operative working for the Cause, er, IRS, leaked them all.
The perpetrator of this leak was sentenced to 5-yr in prison so that confirms that third parties should not have access to precise AGI data for specific households.
Besides, the ProPublica leak was in mid 2021 and thus only included data on returns filed for tax years up to 2020.
But if the 2021 and 2022 tax returns of hundreds of thousands of households was indeed separately leaked like you suggested for this migration study, would you look at the conclusions of the study to point to the likely culprit/beneficiary of this previously-unreported leak?
I think the study may be originally this joint project from 2023:
Internal Migration and “Brain Drain” within the United States: The Relationship between High School, College, and Young Adult Locations
Janna Johnson, University of Minnesota
Dan Black, University of Chicago
How it got to the media, I don’t know but that also made me curious what the high-school and college location part of the study.
All that being said, I’m not sure what gets disclosed in these studies or how I feel about the IRS deciding without taxpayer consent who they give what information to.
My guess (or rather, hope) is that the IRS has sufficiently knowledgeable data scientists working on this project. They probably (hopefully) only provide aggregate answers, and in such a way that the answers can’t be de-aggregated or de-anonymized. I.e., the researchers don’t get direct access to the data, they only submit their queries, and the IRS provides the answers that don’t divulge individual data or even data from a subset that is too small, drop any outlying min/max values, do some rounding, etc.
That’s the easy part, the research isn’t done for nothing. The researchers publish their results, then the media writes articles about it. Though I can’t find their paper…
I like where your head is at @Shandril. I remember first hearing many years ago from, I believe, Milton Friedman, Tom Sowell, Walter Williams, and the GMU Econ guys, how silly it is to talk about IRS Household income over time and use that data to say that people in the 2000s were making less than people in the 1970s. The overall number or percentage of households making under $XX,XXX (adjusted for inflation) from one year to the next doesn’t tell you much because individual households move above and below that line. And even more importantly, household makeup changes. Individuals get married and get divorced. And marriage rates and average ages change over time. Your point that, in order for this research to make any sense, you actually have to follow individual households is one that most people producing these easy headlines hope no one pays attention to.
I’ve been interviewed by media on publications I’ve made and I’ve always been asked how I should be quoted (title, name, department, organization, collaborators, location) usually with source link for my published articles. And I’d get preview copy to edit before publication of the media piece. All that author info give more transparency and backing to the media article. Using someone’s data without proper citation is just extremely unethical and potentially illegal if not publically available.
But this article clearly suggests that they did the study themselves with released IRS data: “SmartAsset used IRS data to rank states …” and in methodology “To determine where the young and rich are moving, SmartAsset examined the latest IRS data, which comes from the 2021 and 2022 tax years.”
So I see 4 options, none of them very elegant: they basically stole credit for research done by others; they used (hopefully anonymous) leaked data from a leak I’m not aware of; they used data I was not aware the IRS was handing over to the media; or they just made stuff up entirely.
Uh, I thought the Trump tax cuts expired in 2025. Are you (the gubment) saying that the Trump tax cuts are permanent? Is Word Salad Annie endorsing this? Does she understand what her endorsement might mean? Does she understand anything that people say? Other than Willie …
I think Harris’s proposal also left the TCJA brackets the same for all below $400k AGI. So either hers or Trump’s proposal would not change the current brackets in 2026.
That’s IF Congress manages to pass a tax reform in 2025 though… Considering recent gridlock, that may be a tall task and a bigger more immediate risk that hypothetical future treatment of Roth accounts.
Potentially the biggest change coming to an end after 2025 is the 10k SALT limit. The bigger standard deduction is dwarfed by the SALT limit as incomes get larger.
With the increases in home values and in turn property taxes, a 400k AGI could be gaining an additional $25-40k tax deduction ( considering state/local income taxes and property taxes ). While this limit is a “tax the rich” type provision, I wonder where the Democrats ( as well as Republicans ) stand on that topic if in control of the tax rules in 2025.
depends on the state. most of the SALT states are liberal. I guess FL/TX is the only exception with high property, but no income taxes. So just buy a smaller house and you’re all set
That assumes the republican Congress will not pass a new tax reform via reconciliation in 2025.
As much as it would be fiscally prudent for the US budget/debt to let the TCJA cuts expire, I have little doubt a new tax reform will happen in 2025, if only to prevent the GOP from losing the 2026 midterms due to a reaction to increased taxes for most taxpayers w/o any tax reform law.
I’d be surprised if the SALT limit was not left mostly untouched, maybe indexing it for inflation. That limit hits more acutely blue states taxpayers so no reason for GOP to not leave it in.
That said, if you’re in a state where you can pay at least some of your real estate taxes in either December or January, I’d definitely leave myself the option to bunch your real estate taxes in 2025 in case the SALT limit is lifted.
Norway’s income/wealth tax on unrealized gains has destroyed their start up sector. Entrepreneurs have left due to punishing taxes on paper valuations of early stage companies, while new companies are started elsewhere now.
After paying around 40 percent in taxes on my income, I faced Norway’s infamous “unrealized gains tax,” which had just been roughly doubled by the country’s left-wing government. This is a tax on the value of assets, even if they’re not sold.
In my case, because the venture-capital investments had increased the company’s valuation, this so-called wealth tax meant that I faced a tax bill many times larger than my after-tax income. The only way to pay it was to sell shares and dilute my ownership in my company. I had investors, yes, but I didn’t have a luxurious lifestyle. I flew economy and lived in the same two-bedroom apartment in one of Oslo’s cheaper neighborhoods.
So I did what an increasing number of Norwegian entrepreneurs have done. I said goodbye to my friends and family and moved to Switzerland.
Ronald Wilson Reagan wasn’t the first, or last, to say this, but his delivery was impeccable - “If you want more of something, subsidize it. If you want less of something tax it.”
When I first saw the headline, I thought it was about Norway’s speeding fines.
Tax programs are so cheap, about $20 for HR block, that this is fixing a problem that does not exist. In my opinion, the IRS would be better off putting their efforts in making it easier for the taxpayer to download the 1099s that the IRS has for him.
