The myth of the fleeing rich just won’t die

Dear Editor,

Ali Jalili’s recent letter repeats a seemingly immortal contention: that raising taxes on high-income earners will drive them out of state. It’s simply wrong on all counts, but it just won’t die. In fact, the evidence against it is overwhelming. 

Americans move in large numbers every year. The Census Bureau tracks these moves and lists explanations. The top reasons given are housing, family, jobs and weather. Taxes do not even appear on the list.  

There have been numerous academic studies of Americans moving from one state to another. Most conclude that taxes are not a major factor. IRS data has long shown that people moving into Vermont earn more on average than those leaving. 

Common sense dictates the same conclusion. Surely, high-income people know Vermont has higher-than-average income taxes and New Hampshire next door has none. Even the anecdotal evidence confirms the same thing. Other than the old joke about the Vermonter who moves across the river because he “just couldn’t take another Vermont winter,” most stories are of Vermonters moving south, usually to Florida, not New Hampshire. If the old saw were true, then those with high incomes living here would have moved across the border long ago, and newcomers would gravitate to New Hampshire, not Vermont.

Jalili suggests that “unlike other very high-tax states, such as California, New York and New Jersey, Vermont simply doesn’t have many high-income individuals.” But since the top 1% (or whatever percentage is used) leaves out, by definition, 99% of the population everywhere — not just in Vermont — the number of people subject to the tax surcharge is always small everywhere. 

Jalili is particularly concerned about doctors, but there is a shortage of doctors everywhere in the country, not just in Vermont. This argument depends on two points, and I suspect neither is true. The first is simple demography: Does Vermont have fewer doctors per capita than other states? Are more of them leaving than coming? How does Vermont compare with other states? 

Second, even if the demographic answers show that Vermont has a larger doctor problem than other places, which I very much doubt, why? Are the reasons similar to those discussed for the population in general — i.e., family, weather and housing — or is there evidence that taxes are consequential? 

Finally, Jalili also cites “consecutive declines in population over the past two years following the pandemic bump” as evidence. But income tax rates in Vermont haven’t changed since 2018. Jalili’s statement contains a much more likely explanation: There was an incoming demographic bump during the pandemic years and then a slight decline as life normalized. 

As everywhere in America, high-income people have been the greatest beneficiaries of economic policies that have dramatically favored them while lower earners have seen little or negative change. Accordingly, high-income folks can afford to pay higher taxes. Depending on the specifics, they may not even have to give up all of their excess gains. 

It’s long past time to raise taxes on the highest-income earners in Vermont. 

John Greenberg
Marlboro, Vt.

Read the story on VTDigger here: The myth of the fleeing rich just won’t die.