Cristobal Young and Charles Varner. National Tax Journal. June 2011.
“Millionaire Migration and State Taxation of Top Incomes: Evidence From A Natural Experiment” takes a look at what happened when New Jersey raised the tax rate on top earners by 2.6 percentage points (one of the highest rates in the United States). They find very little migratory responsiveness among the population affected.
"[W]e find that the 99th percentile (those subject to the new tax) show much the same trends in migration patterns over time. There are small subsets of the millionaire population that are more sensitive to state taxation. Nonetheless, the broad conclusion holds even when looking at the richest 0.1 percent of households." In addition, the tax raises $1 billion a year and "modestly reduces income inequality."
