Migration Myth Moves to Rhode Island

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There’s a definite trend forming among conservative ideologues when it comes to exaggerating the effect of taxes on individuals’ decisions about where to live.  Maryland, New Jersey, and Oregon have all seen bogus claims of this type arise in the last year or two, and Illinois’ recent tax increases have sparked some empty chatter of a similar type.  Unfortunately, Rhode Island can now be added to that list as well.

The Ocean State Policy Institute (OSPI) recently released a report claiming that the estate tax is driving affluent Rhode Islanders from the state.  As Wall Street Journal blogger Robert Frank points out, however, there is very little evidence in the report to support this claim.

The most cited rebuttal to OSPI’s report was issued by the Rhode Island Poverty Institute.  In it, the Poverty Institute starts by making one obvious point that you’d never guess from reading the OSPI report alone: Both the state’s overall population, and the number of wealthy taxpayers contained within its borders, have grown in the last decade.

Moreover, the Poverty Institute points out that “only a handful of Rhode Island taxpayers will ever have an estate that is actually subject to an estate tax, making it highly unlikely that the average Rhode Islander moving to another state is doing so for this reason.”  In fact, Massachusetts, which also has an estate tax, is the favorite destination of outgoing Rhode Islanders.  Admittedly, a sizeable number of Rhode Islanders do move to Florida (which lacks an estate tax), but the same can be said for New Hampshire residents.  And New Hampshire, like Florida, has neither an estate tax nor a personal income tax.

Ultimately, any reasonable person is going to think about a lot more than their tax bill when deciding where to live.  Just don’t expect this fact to be acknowledged by the anti-tax crowd anytime soon.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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