Stanford University Study Shows Taxes Not Driving Millionaires A - Central Coast News KION/KCBA

Modest tax increases do not drive California's millionaires out of state. That's the conclusion of a new Stanford University report released Monday. Those findings counter claims that raising taxes on the wealthy cause them to move to other states.

Using returns filed between 1994 and 2007, the study tracked taxpayers who filed a California return one year, then filed a part-time or nonresident return the following year. They were compared to returns filed after a one percent tax increase on the state's top earners in two-thousand-five. The findings showed that wealthy Californians stay put, even when their tax rates go up.

Cristobal Young from Stanford's Center on Poverty and Inequality "So we're talking about a relatively modest increase in their tax rates, but indeed we find, particularly compared to other high-income earners who are not affected by the tax, that their migration patterns are virtually identical. If anything, we see that people at the very top of the income distribution, people earning five to six million dollars a year, actually even have lower out-migration after the tax. So there's not really any evidence at all that would support the argument that a modest increase in taxes lead to out-migration."

The study showed that while higher taxes may not have had much effect on migration rates, divorce did. High-income earners whose marriages ended left the state at twice the rate of their married peers.