In “Invest, but don’t play Robin Hood” (Op-ed, Jan. 24) Edward L. Glaeser argues that Governor Patrick’s efforts to raise revenue in a way that would make the Commonwealth’s tax system more progressive — i.e., have people with high incomes pay a larger share — won’t work. Glaeser cites a study claiming that “people and businesses can just leave for jurisdictions with more favorable tax conditions.” He also notes that a “separate study of a 2004 New Jersey millionaires’ tax concluded that it resulted in a loss of $2.5 billion in income in the state.”
Glaeser has been very selective in the studies he chooses to cite. For example, he ignores a 2011 study at the University of Massachusetts Amherst’s Political Economy Research Institute, focusing on New England, which “suggests that the impact of taxes on cross-state migration decisions is weak. There are many reasons households do not flee from a state when taxes are increased, including the fact that they value the public services financed by taxes, the cost of relocating to a different state (both financially and psychologically) is quite high, and the potential gains from moving are often small.”
This same UMass study also refers to a study of the New Jersey millionaires’ tax. However, this one concludes that the tax “did cause some very rich households to leave New Jersey, but generated $1 billion in additional revenue and modestly reduced income inequality in the state.”
If we are going to rely on academic studies, let’s look at the full range of relevant material.
The writer is professor emeritus of economics at University of Massachusetts Boston.