People choose to live where they do because of what is most important to them: family, jobs, vibrant communities, and quality of life. When they move from one state to another, they do so to be closer to family, to find or start a new job, to be near great schools, and to secure housing they can afford. Decades of evidence demonstrate that state tax policy plays only the most marginal role in any such decisions to move from one state to another.
While opponents of increasing personal income tax rates on millionaires and other high-income filers claim that doing so will result in a mass exodus to lower-tax states and thereby harm Rhode Island’s economy, they fail to provide convincing data to back up this claim.
There is simply no evidence — not in Rhode Island and not anywhere in the United States — linking changes in top tax rates with large-scale netmigration of higher-income residents or of interstate migration in general. While shifts in tax rates may play some role for individuals in relocation decisions, including where to move once the decision has already been made, the evidence shows this happens only at the margins and that tax rates have never motivated large numbers of higher-income individuals to move out of or into a state.