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National Review: Conn. Lost $2.6 Billion in 2016 Revenue Due to High Earners Leaving State
The state of Connecticut forfeited $2.6 billion in government revenue in 2016 as residents, particularly high-earners, fled the state for a lower cost of living, according to a recent study by the Cato Institute.
The study, released ahead of a tight gubernatorial election that has focused heavily on the state’s high tax burden, found that Connecticut lost 12,254 tax filers over the course of 2016, the sixth highest lost in the country over that period.
“Strictly speaking, AGI (adjusted gross income) does not migrate; people do,” wrote study author and Cato director of tax-policy studies Chris Edwards. “Nonetheless, saying income is ‘migrating’ is rough shorthand for saying that the earning power of households is moving between states.”
The net effect of out-migration was exacerbated by the income gap between those leaving and those arriving in the state, according to the study: New residents earned only 55 percent of their departing counterparts’ salaries on average. The migration rate 1.4 percent for residents earning between $50,000 and $200,000 and 2.1 percent percent for those earning over $200,000. The latter group left at the highest rate, and the loss of just five ultra-wealthy individuals to Florida cost the state government more than $68 billion in tax revenue.
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