TaxesandInterstateMigrationPCBE税和州际迁移PCBE课件

1、Taxes and Interstate MigrationNew Jersey Department of the TreasuryOffice of the Chief EconomistOffice of Revenue and Economic Analysis第1页，共15页。The New Jersey Tax Flight ControversyIn 2019 New Jersey sharply increased its highest tax rates:Marginal rate on income over $500,000 was boosted from 6.37%

2、 to 8.97%.Hughes and Seneca (2019) first documented increased outmigration from New Jersey.Havens (2019) documented large unfavorable shift in wealth movements from New Jersey than from neighboring states.Young and Varner (2019) document outmigration rise at upper end, but Regard loss of tax base as

3、 very small relative to revenue gainArgue that tax increase had little or nothing to do with outmigration Assert high home prices in New Jersey may have spurred outmigration of the well-to-do. 2第2页，共15页。Net Migration from New Jersey3第3页，共15页。Taking another look at the issueYoung and VarnerOnly consi

4、dered taxes and outmigration, not taxes and inmigration (did not consider individuals who did not move to New Jersey as a result of the tax change)Only looked at New JerseyAssumed that 2019 tax hike had no implications on migration patterns of individuals not immediately affected.Essentially looked

5、at direct effect on individual migration decisions, and did not take into account expectational and other indirect effects on the rest of the population.Did not systematically look at the influence of housing costs4第4页，共15页。Study of Interstate MigrationStarted with the IRS migration dataset.This ser

6、ies presents annual state-to-state movements of taxpayers and adjusted gross income. Assumed migrations are influenced byDifferences in unemployment rates (people likely move from high-unemployment rate to low-unemployment rate states)Differences in home prices (people likely move from high-home pri

7、ce to low home-price states)Differences in state income taxes (people likely move from high-tax to low-tax states, especially to those with no state income tax)5第5页，共15页。ResultsStatistically significant effects of income tax rate differentials on annual migration.Housing price differentials also sig

8、nificant.People and income are attracted to zero income-tax states. Hard to distinguish from tax differential effect.6第6页，共15页。Implication of Results for New JerseySuppose NJ boosted its income tax schedule by one percentage point across the board (and no other state changes its taxes).This would be

9、 a very large tax hikeMore than twice as big as the 2019 increase.Static revenue increase would be nearly $2 billion a year.One model (without zero tax attractor or state fixed effects) suggests NJ would see increased annual net outflows ofAbout 4,200 taxpayers (likely about twice as many persons)Ab

10、out $530 million in AGI Average income of affected taxpayers equal to about $125,000.Suggests higher-income taxpayers are most sensitive to changes associated with tax increase.Model with state fixed effects has comparable income loss, but higher loss of taxpayers.Similar calculations can be made fo

11、r any other state.7第7页，共15页。Calculated Effects of 2019 “Millionaires tax”If NJ effective rates had remained at 2019 levels (movement since reflects bracket creep as well as changes in the law), then by 2009NJ would have had roughly 20,000 more taxpayers.Adjusted gross income would be approximately $

12、2.4 billion higher, generating more than $125 million in state income tax. Suggests that revenue boost from 2019 increase has been partly reversed by induced out-migration of the base (as well as lessened in-migration).8第8页，共15页。Some Limitations of the ResultsModel does not estimate migration effect

13、s onBusiness tax revenueProperty tax revenueSales tax revenueThe cumulative tax losses to the state could potentially be larger than the models predictionsResult not necessarily causalA weak state economy could spur both outmigration and tax increases.State fixed effects, unemployment rate would hel

14、p control for this.Still suggests that widened tax differential is at least a symptom to be concerned with.9第9页，共15页。Effect of House PricesA $10,000 increase in New Jersey home prices would be associated with a loss of 1200 taxpayers a year and $66 million in adjusted gross income.Average income of

15、lost taxpayers is in one specification smaller than those affected by a rate increase (about $50,000 a year vs. about $125,000 a year).10第10页，共15页。Preliminary Follow-Up ResultsEstimation of model for New Jersey alone showsVery similar tax effects as that derived from national model.Stronger home pri

16、ce effects.Little evidence for effect of longer lags on tax differential.Suggests that the effect works through the level of interstate differential, not its change.Suggests that the effect does not materially grow or fade over time.11第11页，共15页。Additional CommentsIRS data does not allow separation o

17、f “high-income” and “low-income” taxpayers.Perhaps county migration data can help capture those effects.In any event, effects of tax changes on migration can permeate throughout population.Effect of top marginal rate (purer policy variable) is similar to that of weighted-average marginal rate.12第12页

18、，共15页。Survey EvidenceIn July 2019 subscribers to the NJ Division of Taxations Tax E-Notes were asked about migration patterns.Most likely, these are accountants or other financial advisers.Approximately 200 responded.More than half said that clients had recently left, or expressed interest in leaving the state.Given the option to pick 5 out of a list of 11 potential reasons for outmigration, the top ones wereState income taxes (85.4%)State property taxes (77.7%)State estate taxes (67.0%)Retirement (47.6%)Housing costs (43.7%)13第13页，共15页。Survey Question14第14页