With a millionaire's tax, your son or niece will never get a job in this tough economy, Christie reasoned at a recent town-hall meeting, because "the long, ugly, hairy hand of Trenton is coming to take that [hiring] money."
But that doomsday scenario is bogus, according to a study to be published in the June issue of the National Tax Journal.
Charles Varner, a doctoral candidate in sociology at Princeton University, and Cristobal Young, an assistant professor of sociology at Stanford University, were given special access to New Jersey tax returns to determine the effect of the millionaire's tax, which Gov. Jim McGreevey approved in 2004. They studied tax filings from before and after the tax was instituted, and compared the affected "millionaires" (those earning more than $500,000) to the slightly less rich ($200,000 and above).
"We estimated that 70 tax filers, single or families, moved because of the tax over the four-year period," Varner said in an interview.
That was just 0.04 percent of the millionaires in New Jersey. And retirees or those living off their investments - not business owners - are most likely to leave, the study found.
Not only don't high taxes necessarily cause the job-creating rich to pack up their McMansions and drive their Maseratis to Florida, but the authors hypothesize that it may simply be financially infeasible for business owners to relocate their operations elsewhere.
The sociologists picked New Jersey in part because it increased the tax rate for the richest far more than any other state from 2000 to 2007, and also because it borders three other states where millionaires could conceivably move while keeping their country club memberships.
