Fact Check: Data Shows High Income Households Don’t Actually Leave States With Progressive Taxes
Official Statement from Invest in Washington Now
The conservative Association of Washington Businesses (AWB) is promoting a self-selecting “survey” of its own members as a poll. Not surprisingly, AWB’s members don’t like Washington’s tax on mega-millionaires with annual income greater than $1 million, and some are threatening to find new locations like Florida, the only state with a more regressive tax code than Washington’s.
AWB is not a nonpartisan observer -- they are conservative advocates closely aligned with the Republican legislators that unanimously voted against the Millionaires Tax. AWB has a long history of endorsing Republican candidates for office, and they oppose all attempts to pass progressive taxes that would make the wealthiest people in our state pay what they owe.
And when a reporter asked AWB to name any business that participated in the survey, they wouldn’t do it.
Meanwhile, actual data from across the U.S. show that state taxes do not cause moves by wealthy households. As one economist recently told the New York Times about the wealth flight boogeyman: “It is largely indeed a myth, and it’s more than that — it’s frankly almost propaganda.”
After the capital gains tax, WA gained more millionaires, not less: A study by the Institute of Policy Studies (IPS) found that the “millionaire class” grew by 46.9% in Washington despite the state’s first ever capital gains tax. Their wealth grew by more than $748 billion in Washington state between 2022 and 2024.
People move for family and jobs, not to chase tax rates. The vast majority of people who do move to other states are not pursuing lower taxes, according to the Center on Budget and Policy Priorities (CBPP). “We know this because they have said so. When surveyed, a large majority of people making an interstate move — 68 percent in 2020 — cite job- and family-related reasons as the primary driver of the decision. Only 9 percent cited one of the three other categories that might encompass a desire to pay lower state and local taxes.”
Large numbers of households — including high-income households — move into higher-tax states every year. In fact, “The vast majority of interstate moves are from one low-tax state to another and one higher-tax state to another,” according to an analysis of U.S. Census bureau data by the Center on Budget and Policy Priorities (CBPP).
New York raised taxes on the super-rich and…. now has more millionaires. NY has one of the highest tax rates for the rich in the U.S. but research by the Fiscal Policy Institute found that wealthy residents of New York were less likely to move out of state than those in other income groups, and that they did not leave in large numbers after a major tax increase in 2021. In fact, the number of millionaire tax filers in New York City has grown over the last decade, from about 25,000 in 2014 to 34,300 in 2023.
Massachusetts also raised taxes on millionaires: Other states have raised income taxes on millionaires, including New Jersey in 2020 and Massachusetts in 2022, and did not see significant departures. In Massachusetts, lawmakers approved a “fair share” tax, 4 percent tax on incomes over $1 million in 2022, and revenue has exceeded expectations, and any state out-migration is related to affordability, not taxes, according to new IRS data analyzed by the Massachusetts Budget & Policy Center.
A few more facts to consider:
WA State budget is actually down 60% over the last 30 years: While some complain that the state’s budget is too big, it’s actually been effectively cut by more than half since 1995. According to the Economic Opportunity Institute, when adjusted for income and population growth, Washington’s budget has effectively plummeted by 60%. Between 1995 and 2025, the state’s annual operating budget dwindled from 1.55% to a mere 0.63% of total personal income for every one million residents, accounting for inflation.[2]
WA voters strongly support the Millionaires Tax: Even Tim Eyman admits a repeal of the Millionaires Tax is “doomed.” Polling shows Washingtonians overwhelmingly support fixing Washington’s upside down tax code, with 60% supporting the Millionaires Tax to fund education and health care. This data is backed up by the landslide rejection of Brian Heywood’s I-2109, with 64% of voters choosing to maintain the capital gains tax on extraordinary profits in 2024 and by an independent poll showing 61% support the Millionaires Tax.
About Invest in Washington Now
Invest In Washington Now is a network of over 130,000 Washingtonians from across the state united for a just and equitable tax code. We led efforts to pass the state’s capital gains tax on extraordinary profits and defended it at the ballot last year by defeating Initiative 2109 with over 64% of the vote. Learn more at investinwanow.org
