logo
Please note!
This fact brief was originally published as an experiment to test the concepts behind fact briefs.
Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.
Brief Publisher Logo
FACT BRIEF

Did a 2012 California income tax boost chase away high-earning residents?

By Allegra Taylor
Copy link
email
Copy featured image
email
YES

A 2012 California tax increase on high earners increased the likelihood of a wealthy resident moving from the state by about 40%. A study published last year found that the higher-than-anticipated departures contributed to 45.2% less revenue than expected the first year after the increase, and 60.9% less after two years.

That was a more pronounced reaction than found in earlier studies of so-called "millionaire tax flight." The California increase, approved in a ballot initiative, raised marginal rates to 13.3% for incomes over $1 million.

A study of earlier, more modest state increases found the scale of responses to be insignificant. U.S. tax law changes in 2017 have limited the deductibility of state and local taxes from federal obligations, increasing the impact of higher state tax rates.

This fact brief is responsive to conversations such as this one.
Sources
SSRN: Behavioral responses to state income taxation of high earners
Ballotpedia: Tax increases enacted by California Proposition 30
Stanford: Do millionaires migrate when tax rates are raised?
ABOUT THE CONTRIBUTOR
Gigafact
Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.
FACT BRIEF BY
Brief Publisher Logo
Latest fact briefs
facebook
twitter
email
email
About fact briefs published on Gigafact
Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.