NEW: Study Says Taxes Don’t Drive People to Leave RI
Wednesday, April 13, 2011
A new report says that higher taxes do not cause people to leave the state—contradicting claims made by opponents of tax increases.
The report—put out by Jeffrey Thompson a professor at the Political Economy Research Institute at UMass Amherst—says that other factors, mainly employment and family concerns, are what motivate families to make the move. Moreover, Thompson found that when the revenue from tax increases is used to create jobs, the negative impact of the tax is offset by the increase in people moving in-state for those jobs.
So why exactly aren’t those high taxes driving people away? “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,” Thompson writes in his report.
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