American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy
American Economic Journal: Economic Policy
vol. 15,
no. 2, May 2023
(pp. 424–66)
Abstract
We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires' effective tax rates are only about half the statutory rate, their residential choices are highly sensitive to these taxes, as 35 percent of local billionaires leave states with an estate tax. This tax-induced mobility causes a large reduction in the aggregate tax base. Nonetheless, we find that the revenue benefit of an estate tax exceeds the cost for the vast majority of states.Citation
Moretti, Enrico, and Daniel J. Wilson. 2023. "Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy." American Economic Journal: Economic Policy, 15 (2): 424–66. DOI: 10.1257/pol.20200685Additional Materials
JEL Classification
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H31 Fiscal Policies and Behavior of Economic Agents: Household
- H71 State and Local Taxation, Subsidies, and Revenue
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
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