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Driving the Rich from NYC on Streets Paved with Taxes
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There is a myth surrounding the rich in America. That this group remains constant over time, that we have a caste system in the United States that is as rigid as it is dependable. When times get tough we invariably turn on the rich, increase their taxes in a bid to help us out of our despair.
This same myth extends to the mobility of the rich; the idea that if local taxes increase that people in the affected brackets will simply relocate and protect their assets.
Both perspectives are too simplistic for America.
There is income mobility in the United States, several studies have shown consistent results that people in lower income levels increase their positions while a substantial portion from the higher income levels loose their relative comforts.
• The Federal Reserve Bank of Dallas in 1995 reported that nearly 75 percent of those in the lower income bracket moved up in income range between 1975 and 1991, and 40 percent in the top level income range moved down several notches in the same period.
• In 1996 the Urban Institute study demonstrated that Americans are very mobile between income ranges, with estimates from 25 percent to 40 percent in a single year.
• The 2000 Economic Policy Institute report showed that 60 percent of Americans in the lowest income range in 1969 moved to higher income brackets by 1996, and over 61 percent in the highest income ranges moved downward during the same period.
While Governor Paterson and Mayor Bloomberg fret over the cause and effect of increasing taxes and the potential for the rich to pack up and leave New York. The real concern should be if increasing taxes on the rich will stifle growth and push ambitious individuals to pursue their dreams elsewhere.
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