While blogging for the Wall Street Journal’s “Wealth Report”, Robert Frank recently highlighted a new study showing that the anti-tax crowd’s claims regarding “tax-driven wealth flight and wealth destruction may be exaggerated.” Specifically, the study shows that despite all the fear the Journal tried to whip up regarding the “self-destructive” nature of raising state income tax rates on the wealthy, all of the states typically demonized as being “high-tax” actually saw the number of millionaires’ living within their borders rise substantially between 2009 and 2010.
The new study in question was released by Phoenix Marketing International, and shows that the number of households with more than $1 million in assets increased by 8.1% between 2009 and 2010.
The study also shows that Hawaii, Maryland, New Jersey, and Connecticut have the highest concentration of millionaires in the country. And despite the fact that each of these states recently raised their top income tax rate, each saw the number of millionaires living within their borders rise substantially between 2009 and 2010.
Specifically, three of those states – Hawaii, Maryland, and Connecticut – saw their millionaire population grow at a rate even faster than the 8.1% national average. New Jersey was only very slightly below average, having experienced a 7.4% gain in the number of millionaires between 2009 and 2010.
On the flip side, two of the states experiencing the slowest growth in the number of millionaires – Florida and Nevada – levy no state income tax at all!
With this in mind, all the outrage exhibited by the Wall Street Journal Editorial Board regarding the “self-destructive,” “soak-the-rich theology” of “dedicated class warrior” and Maryland governor Martin O’Malley seems to have been very much off target. After re-reading the Journal’s editorials, it does at least become clear why Frank labeled the debate “increasingly emotional.”
Interestingly, this isn’t the first time that the facts have run counter to the Journal’s (or Grover Norquist's) gloom and doom predictions regarding higher taxes on the rich. Both CTJ and ITEP have in the past taken the time to point out the Journal’s factual errors and other exaggerations on this issue. And in fact, Frank has even helped to highlight some of ITEP’s work in this area on at least one occasion.
One can only hope that the Journal will begin reading their own bloggers’ work and begin to temper their rhetoric next time around. After all, as Frank’s blog post explains, “that demographics and economics matter more than taxes in increasing and retaining wealth may seem like an obvious point.” But ultimately, we wouldn’t recommend holding your breath waiting for the Journal to acknowledge it.