New Jersey: Progressive Income Tax Reform Doesn't Scare Off the Wealthy

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When New Jersey enacted a new top income tax rate of nearly 9% on incomes of over $500,000, opponents of progressive tax policy issued dire warnings that the state's wealthiest residents would flee the state, with detrimental effects both on productivity and tax revenues. Needless to say, those fears proved to be baseless, as a new report out of Princeton University shows that out-migration by wealthy New Jerseyans has been nothing more than a "small side-effect" of the tax hike -- a policy that raises over $1 billion annually for the state. In fact, as a result of strong income growth among the more fortunate members of society in recent years, the number of New Jersey residents with incomes over $500,000 actually increased by 70% between 2002 and 2006.

You can read the report here. For more information, check out New Jersey Policy Perspective, one of the key groups involved in the original passage of this progressive policy.

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