“Exodus on the Parkway,” a new 36-page paper on the impact of tax rates on New Jersey’s economic health begins by noting that it “does not provide proof or hard evidence that high income or high net worth residents are leaving New Jersey because of high tax rates.” (emphasis added)
It’s odd, then, that the report goes on to build a case counter to that finding, implying that New Jersey’s wealthy are frequently signing mortgage documents and hiring moving vans in order to pay less in taxes. It does that by citing numerous anecdotes and highly selective examples in lieu of data-driven evidence, and by attributing unsurprising facts, such as retiring New Jerseyans relocating to Florida, to the wealthy fleeing high taxes – not, for example, differences in the weather or the cost of living.
“Exodus” traces the beginning of this supposed great wealth flight to 2004, when New Jersey increased income tax rates on the state’s highest-income households. It claims that the state has seen “an increase in the loss of tax revenue” since then, but fails to note that the loss isn’t really a loss, since it was more than offset by the tax revenue raised by the higher tax rate.
If the wealthy are indeed so eager to leave the Garden State, as the report suggests, why doesn’t that square with actual data presented in the report? “New Jersey has suffered a small out-migration of high income households,” the report reads. “The number of high-income households in New Jersey has continued to grow significantly.” (emphasis added)
This is not to suggest that New Jersey is a tax haven for the rich. However, “Exodus” fails to substantiate its tone and its own top-line message while continuing the fiction that tax rates are the state’s most pressing economic problem.
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