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Globe article on the out migration of wealthy people from Massachusetts

www.bostonglobe.com

‘Everyone’s leaving’: Why more of the wealthy are moving from Massachusetts to other states - The Boston Globe

Investors and financial experts are seeing an exodus of rich people from the state, spurred by tax policies and a relative decline in the innovation economy.
www.bostonglobe.com www.bostonglobe.com

The gist of the article is that Millionaire's tax and the state aggressive estate tax has wealthy increasingly moving elsewhere. Florida and New Hampshire are mentioned. The millionaire's tax is impacting not only people with high incomes but also people selling expensive homes. Due to the poor business climate in Massachusetts, some entrepreneurs are setting up shop elsewhere. The out migration of the wealthy and the fact that some business owners are choosing to start or grow businesses in other states vs Massachusetts is permanently removing income, jobs and potential tax revenue from the state in the long run.

Excerpt:
"Massachusetts faces a harsh reality: It isn’t about what’s fair. Without any national push to raise taxes on the wealthy, it’s a race to the bottom among states. And in order to impose its vision of fairness, our state may ultimately pay a very high price.
“Massachusetts thinks [the new tax has] been a big tailwind, and it’s got a couple billion dollars of collected revenue,” says Karger. “That’s shortsighted. They’re going to need that, because people are leaving.”"
 
commuter guy said:
The gist of the article is that Millionaire's tax and the state aggressive estate tax has wealthy increasingly moving elsewhere. Florida and New Hampshire are mentioned. The millionaire's tax is impacting not only people with high incomes but also people selling expensive homes. Due to the poor business climate in Massachusetts, some entrepreneurs are setting up shop elsewhere. The out migration of the wealthy and the fact that some business owners are choosing to start or grow businesses in other states vs Massachusetts is permanently removing income, jobs and potential tax revenue from the state in the long run.
Click to expand...
Other than this article's assertions - i'm not sure that theres any data/analysis that backs up the position that millionaires are fleeing. If anything the secondary indicators (tax revenues) seem to indicate that the millionaires are staying put (or potentially making more than ever since the new tax income has been increasing faster than expected and faster than other sources of funding)
 
as02155 said:
Other than this article's assertions - i'm not sure that theres any data/analysis that backs up the position that millionaires are fleeing. If anything the secondary indicators (tax revenues) seem to indicate that the millionaires are staying put (or potentially making more than ever since the new tax income has been increasing faster than expected and faster than other sources of funding)
Click to expand...
The Globe does address this somewhat, but again with conjecture. The millionaires tax has kept increasing in revenue, but blockbuster (and unsustainable) market returns likely play a role. There are real questions about what would happen in a down market year, let alone correction/bear market territory.
The question of whether the millionaires tax has been successful is controversial. The Institute for Policy Studies points to the fact that between 2022 and 2024, Massachusetts households with at least $50 million increased by more than 25 percent (from about 2,000 to about 2,600).

But during those years, the stock market also skyrocketed. It’s possible that lots of wealthy people took their tax dollars to other states, but a batch of new residents joined the $50-million-plus club. Now, the question is: What will happen to those people, their tax dollars, and the jobs they create?
Click to expand...

The biggest gripe I have is that the state DOR could address a lot these questions if they chose. With access to all state tax records, the following could be answer easily:
  • How many millionaires (or any tax bracket) from one year did not file in MA the next year?
  • How many millionaire filers did not file in MA the previous year?
  • How many millionaire filers were not filers the year before or after?
  • How did the income of millionaire earners change in the following years?
  • How many millionaire earners are there in different towns?
With that data in hand, we could have a more comprehensive discussion on the state's competitiveness for high-earners. And to be clear, I don't think this data is being withheld deliberately to hide bad numbers. Just a lack of interest or care by state leadership.
 
I agree the article is filled with anecdotal evidence. That being said I do recall seeing some data that Massachusetts has some of the highest out migration of high earners in the country, this pattern existed before the pandemic and has only accelerated since the pandemic. While not specific to the Millionaire's tax, from what I recall seeing recently is that the IRS keeps track of migration of households by income bracket, For the highest bracket they track (households making over 200k) Mass is at the bottom of the pack in net migration. I think only California, NY, and Illinois have had more net out migration of high income earners.

Whatever the root cause of this out migration is, I think it's concerning for the state in the long term.
 
BeansTheCat said:
The Globe does address this somewhat, but again with conjecture. The millionaires tax has kept increasing in revenue, but blockbuster (and unsustainable) market returns likely play a role. There are real questions about what would happen in a down market year, let alone correction/bear market territory.


The biggest gripe I have is that the state DOR could address a lot these questions if they chose. With access to all state tax records, the following could be answer easily:
  • How many millionaires (or any tax bracket) from one year did not file in MA the next year?
  • How many millionaire filers did not file in MA the previous year?
  • How many millionaire filers were not filers the year before or after?
  • How did the income of millionaire earners change in the following years?
  • How many millionaire earners are there in different towns?
With that data in hand, we could have a more comprehensive discussion on the state's competitiveness for high-earners. And to be clear, I don't think this data is being withheld deliberately to hide bad numbers. Just a lack of interest or care by state leadership.
Click to expand...
To maybe put your mind at ease, the question of "Do the rich move in response to higher taxes?" has be studied a lot. And the answer is always the same: Yes, a very tiny number of millionaires will move. Think a fraction of a percent. Overwhelmingly rich people don't move in response to taxes. And every study also comes to the same conclusion that revenue-maximizing tax rate on the rich would be much, much higher than any state imposes.

Here is a mind-bogglingly thorough study. Researchers at Stanford had access to all IRS records for all millionaires in the country for over decade and tracked their migration patterns. Their conclusion:
We find that millionaire migration is indeed responsive to top income tax rates. However, the magnitude of the migration response is small and has little effect on the millionaire tax base. The implied revenue-maximizing tax rates on top incomes are much higher than current state policies.....
Elites are embedded in the regions where they achieve success, and they have limited interest in moving to procure tax advantages.
Click to expand...
This has been studied over, and over, and over again.

There is no reason to think Massachusetts is any different. And I don't think the conversation would change if DOR actually released all the data you're asking for. Rich people will continue to scream about how horrible their taxes are, and threaten to leave. Gullible reporters will report on those tantrums as if there is some reasonable policy debate going on.

I might come back to this because that Globe article really has every dumb trope that comes up in these discussions. It might be useful to have one debunking to point to the next time a "The Millionaires are Leaving!" article comes out.
 
ritchiew said:
To maybe put your mind at ease, the question of "Do the rich move in response to higher taxes?" has be studied a lot. And the answer is always the same: Yes, a very tiny number of millionaires will move. Think a fraction of a percent. Overwhelmingly rich people don't move in response to taxes. And every study also comes to the same conclusion that revenue-maximizing tax rate on the rich would be much, much higher than any state imposes.

Here is a mind-bogglingly thorough study. Researchers at Stanford had access to all IRS records for all millionaires in the country for over decade and tracked their migration patterns. Their conclusion:

This has been studied over, and over, and over again.

There is no reason to think Massachusetts is any different. And I don't think the conversation would change if DOR actually released all the data you're asking for. Rich people will continue to scream about how horrible their taxes are, and threaten to leave. Gullible reporters will report on those tantrums as if there is some reasonable policy debate going on.

I might come back to this because that Globe article really has every dumb trope that comes up in these discussions. It might be useful to have one debunking to point to the next time a "The Millionaires are Leaving!" article comes out.
Click to expand...
Seems worth a letter to the editor to be honest.
 
dames said:
Curious what people's take is on this article.

www.bostonmagazine.com

Is the Massachusetts Economy Cooked?

The unraveling of the Bay State's economy—and why the clock's ticking.
www.bostonmagazine.com www.bostonmagazine.com
Click to expand...
A bleak outlook to be sure. You'd think more folks at the state and local level would be seeing all these warning signs and start taking more bold action, like aggressive zoning reform.
 
dames said:
Curious what people's take is on this article.

www.bostonmagazine.com

Is the Massachusetts Economy Cooked?

The unraveling of the Bay State's economy—and why the clock's ticking.
www.bostonmagazine.com www.bostonmagazine.com
Click to expand...
Probably the State government should take a detailed, unbiased look at what the business-friendly states are doing, the states where businesses and people are moving to. Then, Massachusetts should streamline its regulatory, zoning, and tax policies accordingly.
 
dames said:
Curious what people's take is on this article.

www.bostonmagazine.com

Is the Massachusetts Economy Cooked?

The unraveling of the Bay State's economy—and why the clock's ticking.
www.bostonmagazine.com www.bostonmagazine.com
Click to expand...

What I don't understand is why every single one of these doomsday articles make the same false claim that Massachusetts is losing residents. THAT IS NOT TRUE. Domestic outmigration is higher than domestic growth, sure. Population growth overall is slowing to a crawl, sure. But the population of MA is increasing, and that is a simple fact that you can't lie about just to support some pre-determined narrative.
 
He is the local conservative truth teller. Jon Keller has been writing this stuff for over 40 years so his many dark predictions of our future have, thus far, been completely wrong and Boston Magazine is unaware that most Bostonians live south of Albany Street

You asked...
 
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Jeremi said:
The gist of the article is that the President, a notorious elderly pedophile, does not like Massachusetts and his group of drunks, freaks, perverts, and apocalyptic Christian nationalists is punishing the state. So what should the state do? Become shittier to make him happy? Is that really the recommendation?
Click to expand...
Jon Keller is an intellectual simpleton, and always has been. There isn't a complex problem in the world to him that inside-ball political triangulation won't lick, no matter how many times he's been proven wrong again and again and again.

Frankly WBZ made a stopped-clock good decision to let him go last year when corporate parent CBS forced mass layoffs on them, because it's been literally decades since he's brought anything to the table with his "analysis". But then they had to go out and relapse last week and hire him back as a special contributor. So it goes. 🤷‍♂️
 
as02155 said:
Seems worth a letter to the editor to be honest.
Click to expand...
Thanks! I took your advice. If I thought they'd publish it, I'd have spent another ten minutes on it, but it gets the point across. It seems lots of people took issue with that article:

www.bostonglobe.com

The wealthy talk a good game, but will they really say, ‘See ya,’ to Massachusetts? - The Boston Globe

"What seems more likely is that these rich people are trying to frighten Massachusetts into repealing the 'millionaires tax,' " writes one reader.
www.bostonglobe.com www.bostonglobe.com

I still kind of want to dissect that article here, in more than 200 words, because it really rehashes the same bad logic as other similar articles.
 
commuter guy said:
Globe article on the out migration of wealthy people from Massachusetts

www.bostonglobe.com

‘Everyone’s leaving’: Why more of the wealthy are moving from Massachusetts to other states - The Boston Globe

Investors and financial experts are seeing an exodus of rich people from the state, spurred by tax policies and a relative decline in the innovation economy.
www.bostonglobe.com www.bostonglobe.com

The gist of the article is that Millionaire's tax and the state aggressive estate tax has wealthy increasingly moving elsewhere. Florida and New Hampshire are mentioned. The millionaire's tax is impacting not only people with high incomes but also people selling expensive homes. Due to the poor business climate in Massachusetts, some entrepreneurs are setting up shop elsewhere. The out migration of the wealthy and the fact that some business owners are choosing to start or grow businesses in other states vs Massachusetts is permanently removing income, jobs and potential tax revenue from the state in the long run.

Excerpt:
"Massachusetts faces a harsh reality: It isn’t about what’s fair. Without any national push to raise taxes on the wealthy, it’s a race to the bottom among states. And in order to impose its vision of fairness, our state may ultimately pay a very high price.
“Massachusetts thinks [the new tax has] been a big tailwind, and it’s got a couple billion dollars of collected revenue,” says Karger. “That’s shortsighted. They’re going to need that, because people are leaving.”"
Click to expand...
Ok, jumping back to this article kind of late, but it covers so much of the bad logic regularly thrown into the millionaires tax debate. Keep these in mind the next time a bad article on this inevitably comes out.
  • Just for this article, it is ostensibly about broader conversations of the "state’s competitiveness as a place to do business, build companies, and raise a family." But it's not. This is just about taxes. The only policies it actually discusses are taxes. One interviewed rich guy specifically says "It's not the tax," but also he doesn't point to anything else. This is really all about taxing rich people. Rich people don't like it.
  • As I said upthread, there is a mountain of evidence showing that rich people overwhelmingly don't move based on tax rates. This has been so conclusively studied, and I'm just going to be skeptical of any article that doesn't at least mention that. If you, the reader, know that this has been exhaustively studied, then you'd probably set a high bar for what constitutes new, persuasive evidence, and the anecdotes in this article would look obviously silly. But journalists ignore that mountain of evidence and pretend like Massachusetts is the first state to ever change their marginal tax rate. It lets writers throw in some flimsy anecdotes and spin whatever story they want.
  • One trope in these kinds of articles is the reporter never manages to find someone who has actually left the state because of the millionaires tax. You get secondhand accounts ("oh, I know people who..."), clear exaggerations ("everyone's leaving..."), and people planning to leave (historical evidence says they're bluffing). But I've read a bunch of these kinds of articles and I don't think I've ever seen a reporter track down a single person who has actually left because of the millionaires tax. If there is some mass exodus going on, and the reporter interviews a bunch of people, and the reporter can't contact one person who has actually left, that should be a big red flag. When someone says "All my millionaire friends are leaving because of this tax," the reporter's next question really ought to be: "Can I talk to one of them?" (Maybe someone will come forward someday. I look forward to that a little bit. They will be hilariously loathsome.)
  • Related to the last one, you might read this article and assume Craig Welch is a millionaire who fled because of this new tax. The article gives that impression, but that's not correct. He left in 2015. I think it is actually insidious that the article does not make that totally clear. It seems almost intentionally misleading. (BTW, I know he left in 2015 because of the State Supreme Court decision about his attempted tax evasion. Take that for what you will.)
  • Articles like this often play loose with dates like that. This article also mentions a lot of rich people who left the state during early Covid, but again, that's before the millionaires tax was even proposed (and during a deep, global social/economic upheaval).
  • One common trope is mixing in general migration stats as if they're relevant to millionaires specifically. They're not. Less than one percent of the state pays the millionaires tax. They are rare and different in all kinds of ways, and pointing to general population stats is meaningless. For example, this article mentions how many tens of thousands of people moved from Massachusetts to New Hampshire or Florida. That tells us nothing about whether millionaires are overrepresented in that group, or underrepresented, or not a part of it at all. Even if they're overrepresented, they'd still be a tiny minority of the people leaving, and the numbers still wouldn't really be that relevant. It says nothing about historical trends or suggests other reasons people might be leaving. We know from surveys that lots of those people are non-millionaires leaving because of high housing costs. These are meaningless statistics, but they often get trotted out.
  • My favorite trope in these articles is combining into one group all the millionaires who have left (virtually none) with all the millionaires threatening to leave (plenty). "Half of my Massachusetts clients over the last five years have either left or are planning to leave," says the wealth manager. But the people who are "planning" to leave... haven't left. Again, historical evidence says they're bluffing. So half of his clients have either left the state... or not left the state. This is meaningless. If there were some sizable portion of people who have actually left, they would not need to also lump in all other people who are most likely just having little tantrums about taxes.
  • This article starts with quotes from a wealth manager for the rich. This is actually a trope in these articles: talking to wealth managers or accountants or personal bankers for the rich. I'll admit, these kinds of people might have some interesting perspective on things, if they could bring out some solid examples, stats, or evidence. But they never do (see previous point). And since they're not presenting good evidence, it's worth remembering that their actual job is to protect clients' money. What they are doing lobbying for lower taxes on behalf of their clients. "Taxes are too high for the rich!" says the guy whose job involves finding ways for rich people pay less in taxes. Red flag.
  • And last is the "But over time..." trope. It's hinted at in this article, but I've seen it come up elsewhere more explicitly. There is usually some acknowledgment that the new tax is bringing in tons of money, even more than expected. But over time, the argument goes, millionaires will leave. The current windfall is "shortsighted" because over time this tax will cause harm. First of all, when that's what the argument becomes, that seems like an admission that millionaires are not actually "fleeing," and the tax is having a marginal effect at most. But second, it's not true. Again, this stuff has been studied. This study tracked every millionaire in America for 13 years and found that "millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance." If 13 years isn't enough time to see any problematic trends, then I think we're in the clear. We're not dooming the state. We're just raising more badly needed money for government services.
 
beck4537 said:
www.bostonmagazine.com

Is the Massachusetts Economy Cooked?

The unraveling of the Bay State's economy—and why the clock's ticking.
www.bostonmagazine.com www.bostonmagazine.com

Spoiler alert! It's not good...
Click to expand...

1775185746326.png


Hmm.
 
beck4537 said:
www.bostonmagazine.com

Is the Massachusetts Economy Cooked?

The unraveling of the Bay State's economy—and why the clock's ticking.
www.bostonmagazine.com www.bostonmagazine.com

Spoiler alert! It's not good...
Click to expand...
This reads like my uncles unhinged family e-mails. Like a lot of "facts" but not really anything that points to economy-wide statistics. But, you know what, I won't sell magazines or clicks if it's not a bit unhinged.
 
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