Over the last few months, we at OpenLeft have been tracking the biggest tax fight America's never heard about - the fight in New York state to slightly raise levies on the super-wealthy in order to avoid major budget cuts. This is of huge import because New York is one of the most economically unequal states in the country, and the home of the ruling class. To win a tax fight in New York is to win a major battle for the progressive movement.
There is surprisingly little evidence to support the proposition that rich New Yorkers would bolt if forced to pay higher income taxes. Though tracking the movement of wealthy taxpayers from state to state is difficult, experts on public finance and migration say they have yet to document a substantial "rich drain" in states that have raised income taxes in recent years...
Pressured by enormous budget deficits, officials in Illinois, Hawaii, Wisconsin and New Jersey are considering new taxes on the rich. Lawmakers in Albany have discussed several proposals, including increases for those earning more than $250,000.
But even experts who oppose such taxes on other grounds - out of fear that they will retard economic growth and innovation, or encourage lawmakers to indulge in bouts of new spending - concede that there is not much evidence that raising taxes on the wealthy would drive out a significant number.
There's no doubt that opponents of tax reform at the state level will keep pushing this canard. But there's also no doubt that it is a canard.
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