Sure they do. Looking forward to the press finding out the identity and ideological agenda of the folk(s) who accessed these tax returns.
Seems to me that the correlation is tenuous at best, forced narrative at worst. Texas was actually middle of the pack in % AGI gained and still is one of the less favorable states for total taxation level so the migrations could well be explained by many other things than income tax rate.
IMO what would be more useful is correlation with state tax law changes across the same states. If tax laws haven’t changed dramatically, attributing AGI gains to tax levels seems a bit random. What would also have been nice is looking at how each state total tax revenues changed as result of migration. If you gained AGI but lowered taxes, revenues could still be neutral or decreasing. For example, AGI gains have no direct impact for states that do not have income tax.
Certainly lack of state income tax may be a factor for some moving to FL or NV (or some snow birds electing to become residents of these states by spending half the year there). But it’s also far from the only one. Take AK which has no state tax and was the second largest tax base loser in % AGI. Vice versa the biggest gainer in % AGI was Idaho which does have income tax.
Here’s another site that compiled taxation levels across states. Bottom line, the picture is more complicated when you look at total taxation levels. Wallet Hub Best/Worst States for taxation
I think this is the part that grates most people including myself. Borrowing to fund lifestyle is IMO the most glaring loophole and one which I’d look to plug first if I were after raising tax revenues. Maybe via a consumption tax so that at least what they spend on lifestyle gets taxed. Donations to your own foundation is another layer of cheese on this wealthy tax avoidance playbook. Cap deductions from charitable donations to a low number like $1M/yr and you’d see this nonsense disappear. I’d rather see them plug these two loopholes than hike rates on capital gains or play around with a wealth tax, stock market transaction tax, etc.
I think what’s driving a lot of the moves is the combination of
it’s the rich who can easily move, esp with remote work / covid, so tax policy on the high end matters most, and
the removal of the SALT deduction at the Federal level significantly increased the net cost of living in a high tax rate state, since for those paying 1/3 of their income in federal taxes, this corresponded to a 33% discount on their state tax bills (and a corresponding subsidy to those high tax states).
With that discount gone, a hypothetical 37% Fed + 13% state such as NYC/CA would have a 50% marginal rate now, but with the SALT deduction that would be only 45%. That’s a 10% raise on your after tax take home for leaving some states that seem to be having crime and fiscal problems anyway…
While TX has other taxes (no income tax but property, sales etc), the combination of the lower property values compared to expensive high COL states where many rich people live (NYC, SF, Seattle) means that even if the % property tax rate is similar or even higher, the absolute dollars could well be significantly lower given the lower valuations. Likewise, sales tax matters less for those with lots of money since most of their money isn’t getting spent.
Biden’s estate tax implications. Real estate especially gets hit on death.
The American Families Plan would result in negative value at death for many long-held leveraged real-estate assets. Ignoring the exemptions, if a $12 million estate included a long-held building with a fair market value of $5 million, debt of $4 million and a tax basis of $900,000, the capital gains tax at death would be nearly $1.7 million. The $672,800 in excess of the fair-market value after debt would be a liability against the remaining estate.
Scenarios in which the new death tax would significantly reduce, nearly eliminate or even totally eliminate the net worth of decedents who invested and held real estate for decades wouldn’t be uncommon.
Now consider an actual couple who would likely escape the new tax entirely. Joe and Jill Biden have an estimated net worth of $8 million, according to Forbes. Mr. Biden’s disclosures indicate that their assets consist of two personal residences along with several annuities and life insurance policies. The only assets that would be subject to a capital-gains tax at death would be their two homes, the appreciation on which likely amounts to less than the $2.5 million in exemptions for a married couple.
If you think taxing unrealized gains, on death or otherwise, looks bad now, wait til inflation from all those federal trillions shows up. The headline 40-50% wealth confiscation rate could be much higher on a real, inflation adjusted basis.