One argument against states imposing a millionaire tax is that it will only encourage those wealthy individuals to move elsewhere. But a new study of IRS data found that U.S. millionaires who earn $1 million or more per year are one of the groups least likely to relocate to a new state, presumably because that income is tied to their current locale.
Interestingly, the lower your income, the more likely you are to move. U.S. migration rates from 1999 to 2011 show that folks earning $10,000 or less a year have the highest rates of relocation, a rate which falls as incomes increase.
However, the small percentage of millionaires who do move are indeed more likely to move to a state with lower tax rates—especially to zero-income-tax Florida where the evident increase in millionaires was christened "the Florida effect."
Even with the Florida effect, the study found that only 2 percent of millionaires relocate for tax reasons.
The study surmises that how much money one makes is a product of where you live—just think of the high incomes commanded in Silicon Valley or New York City.