TRENTON – Refuting other studies that showed the millionaire’s tax did not cause a massive out-migration of residents, the state’s chief economist released a report Monday that said that the high income tax rates may have prevented would-be residents from moving into New Jersey, and thus reduced potential tax revenues.
“It may have discouraged people from moving in to the state,” said Charles Steindel, chief economist at the Treasury Department, at the Garden State Economic Forum.
Another study by Princeton University this year said the outmigration of New Jerseyans had little to do with the millionaire’s tax and more to do with escalating home prices. However, Steindel said the study failed to take into consideration how many people didn’t move to New Jersey because of the tax. By his estimates, if the tax weren’t put in place in 2004, the state would have had some 20,000 more taxpayers, generating more than $125 million in revenue, based on an adjusted income of $2.4 billion.
Steindel said the high-income people who do leave tend to be replaced with fewer people making less money.
Representatives of that Princeton study called out on Steindel’s analysis, saying it was a “mischaracterization” of their study. They added that the study did indeed take in-migration into consideration.