In past posts I have analyzed the general effect of state tax rates on state economies. A more focused objection to high taxes by the right concerns the tendency for wealthy people to choose to reside in low tax states. Minnesota Governor Mark Dayton recently dropped his demand for an income tax increase on the top 2%. Disagreement over this proposed tax has led to one of the longest state government shutdowns ever. The Star Tribune quoted Scott Wine, CEO of Minnesota based Polaris Industries, saying "I want to be in as low a tax state as possible." Wine said that he might move when he retires.
Forbes conveniently publishes a list of billionaires each year. This year it lists 412 of them residing in the United States (including three in the District of Columbia), but only categorizes 400 of them by state residence (presumably information on residence of the other nine wasn't available). I charted the number of billionaires per one million residents in each state as a function of the 2010 state tax to gross state product ratio. The results show a slight preference for billionaires to live in low tax states. The national ratio for these 400 billionaires in all 50 states is approximately 1.298 billionaires per one million residents. The chart is skewed by the fact that there are 11 states with no billionaires (for example, both Iowa and Vermont have no billionaires and are therefore ranked equally, even though Iowa's population is about five times that of Vermont's- presumably indicating that billionaires find life in Iowa much less appealing). It should also be noted that the Forbes list is not an exact one person per entry list. The fourth richest U.S. resident, for example, is identified as 'Christy Walton & Family.' The three highest tax states (Vermont, Alaska, and North Dakota) all have no billionaires. Wyoming, a state with an above average tax rate, has by far the greatest ratio of billionaires.
In case you were wondering, Scott Wine is not a billionaire.
Forbes conveniently publishes a list of billionaires each year. This year it lists 412 of them residing in the United States (including three in the District of Columbia), but only categorizes 400 of them by state residence (presumably information on residence of the other nine wasn't available). I charted the number of billionaires per one million residents in each state as a function of the 2010 state tax to gross state product ratio. The results show a slight preference for billionaires to live in low tax states. The national ratio for these 400 billionaires in all 50 states is approximately 1.298 billionaires per one million residents. The chart is skewed by the fact that there are 11 states with no billionaires (for example, both Iowa and Vermont have no billionaires and are therefore ranked equally, even though Iowa's population is about five times that of Vermont's- presumably indicating that billionaires find life in Iowa much less appealing). It should also be noted that the Forbes list is not an exact one person per entry list. The fourth richest U.S. resident, for example, is identified as 'Christy Walton & Family.' The three highest tax states (Vermont, Alaska, and North Dakota) all have no billionaires. Wyoming, a state with an above average tax rate, has by far the greatest ratio of billionaires.
In case you were wondering, Scott Wine is not a billionaire.
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