Of course, as the Senior Lecturer insists, people just do not move for tax reasons

Overall, we conclude that state taxes have a significant effect on the location of star scientists. While many fac­tors determine where innovative individuals and companies decide to locate, enough firms and workers are at the margin that relative taxes do matter.

How odd, reality and the Senior Lecturer seem to be in conflict here.

Do note that this is abut state income (and corporate) taxes which vary from 0 to 10 % or so. When we start to talk about variances in national taxes which can be from 0% to 80% (in his dreams) the effect will be?

15 thoughts on “Of course, as the Senior Lecturer insists, people just do not move for tax reasons”

  1. i thought the potato believes that the optimum tax rate is 60%. Therefore if we put income tax up to 60% we will be flooded with doctors/engineers/nurses/scientists etc (real ones- not the make believe third worlders who have to be taught how to use a pencil) solving at a stroke nhs staffing crisis. and making the uk a paradise on earth. Or is that not true?

  2. Since the original article relates to US state taxes as opposed to tax competition between nation states there are a few other factors to consider.

    The states who have non-zero income taxes tend to be the coastal states who also have a high cost of living which gives rise to higher costs for employing workers, so it is a triple whammy.

    In addition, unlike an international relocation there are no language barriers (well…), no complex corporate restructuring (since most US companies are registered in Delaware and can remain there), in fact by-and-large you can rent some new offices and just schedule the movers.

    International relocation, especially to tax haven jurisdictions are a nightmare. Primarily because of the barriers constructed by the high-tax states to prevent such flight.

    Ask me how I know?

  3. Ritchie says that no one moves for tax reasons, but also wants the law changed to tax on the basis of passport rather than residence which shows he doesn’t believe what he says. I suspect he’d like to construct a wall to prevent people leaving, but is reluctant to say that publicly.

  4. Err, people move for tax reasons within Switzerland. The German-speaking villages of Gals and Gampelen in Canton Bern are flooded with French-speaking Neuchatelois from a couple of miles away.

    And likewise Cudrefin in Canton Vaud is flooded with Bernese, as well as Neuchatelois who will tolerate a longer commute.

    And don’t get me started on the Zürich / Schwyz / St. Gallen trifecta further east… Or Luzern / Nidwalden / Obwalden…

  5. @dearieme

    “People move for money reasons. By convention, taxes are paid with money.”

    I thought you were married?

  6. Sam Jones

    If you look at the closest state in practice to his vision that is exactly the case. You either have to get across a fortified demilitarised zone or swim a river. I think that’s one of the main reasons he likes the UK or Ireland thought. No need to build a wall. He’ll just stop all air traffic and ships for environmental reasons…..

  7. Tim

    My only criticism is your belief that 80% would be his dream rate – 99% and even that 1% would be given grudgingly..

  8. I notice how it’s the Progressive consensus that our economy and healthcare system can only survive by sucking resources out of other countries. I think we used to have a name for that back in the 19th century.

    To paraphrase our host’s tractor analogy, the product of Brexit could well be a Polish/Romanian/Nigerian healthcare system.

  9. My only criticism is your belief that 80% would be his dream rate – 99% and even that 1% would be given grudgingly.

    With the curajus state fulfilling every need, there will be no requirement for vulgar money.

  10. abacab: And don’t get me started on the Zürich / Schwyz / St. Gallen

    Friedrich Dürrenmatt’s Das Versprechen might be worth a read if you’re feeling obsesive.

  11. I live in Scotland and it seems we are to have our very own British experiment in this. Already, higher rate taxpayers are paying a bit more than the rest of the UK as the Scottish government has not raised the threshold but is now wanting to raise income tax for most tax payers.
    We can see how this will go.

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