Sociologist Gregory D. Squires argues that it’s a myth that taxes drive millionaires to flee cities and states that tax them. An abridgment of Squire’s Baltimore Sun commentary, from Monday, January 26, 2026, forms the second half of this piece, where he provides empirical evidence that this belief is false. I believe it is false because many of the wealthy recognize that they need to be taxed, fairly, of course, to sustain a livable economic and social environment for all.
Unfortunately, the belief that millionaires will flee is one both Republicans and Democrats often espouse. Squire quotes then-Republican New Jersey Governor Chris Christie, “If you tax them, they will leave.” Meanwhile, Democratic California Governor Gavin Newsom has opposed a proposed state wealth tax on the grounds that it will scare wealthy Californians away and has concluded, “Wealth taxes are going.”
Despite this persistent myth, there is broad public support for equitable taxation.
In February 2025, Seattle voters passed Proposition 1A of Initiative 137, by 60%. It was a citizen-led initiative to fund mixed-income social housing through a new “excess compensation” tax. The tax requires firms to levy a 5% tax on salaries and compensation above $1 million. For instance, if a company paid an employee $100,000 above $1 million, the company would pay $5,000 in tax. In total, about 170 of the 50,000 active businesses registered in Seattle would be subject to this tax, not individual workers.
Overwhelmingly, Seattle voters believed it was a fair tax, given that the housing shortage in the Seattle metropolitan area is most acute among the lowest-income renters. In Seattle, studies show that 86% of those earning the median income (AMI) have to devote between a third and a half of their gross income to rent and utilities.
Outside of Seattle, statewide polling shows that the public recognizes it’s time to start taxing the wealthiest, so their taxes, like everyone else’s, are based on their ability to pay. For instance, 61% of Washingtonians support a 9.9% tax on incomes above $1 million, while just 29% oppose it, according to a poll from Northwest-based DHM Research.
Most importantly, DHM polling showed that “There is a majority backing for the tax across all parties: 71% of Democrats, 54% of Republicans, and 52% of Independents or other (third-party) voters support it.” Additionally, Seattle Times columnist Danny Westneat noted that support for the wealthy to shoulder their share of funding for government services cuts across geographic lines. For instance, 14 of Eastern Washington’s 20 counties, most of which are rural, including some of the redder places in the state, voted to retain that tax on the rich in a 2024 vote on a capital-gains tax.
Although there is support for taxing the wealthiest, there is no support for taxing the middle or upper-middle class, who are already paying their fair share. Opponents of taxing the wealthiest campaign by blurring the magnitude of income between them and those holding far less wealth, yet still middle-class. The DMH’s survey found that voters strongly rejected applying even a lower rate of less than 9.9% to incomes of $100,000 or above, rather than starting at $1 million.
Consequently, large Democratic-voting cities would be targeted by campaigns that spread fear of job loss and future income tax increases to defeat attempts to raise taxes there. For instance, the ten wealthiest cities with median household incomes at or slightly below $100,000 are all heavily Democratic-voting, as are other large urban regions.
A spokesman for the wealthy explains why he left when the wealthy were taxed.
Howard D. Schultz, former chief executive officer of Starbucks for over twenty years, explained in a WSJ editorialwhy he left Seattle and Washington state. His final line offered his most articulate reason, not a heated rant. He simply said that governments have become “ineffective public systems” whose policies promote this condition and then tossed in a snide remark that local “political rhetoric that demonize businesses” was also to blame.
He argued that “civic leadership—while imperfect—understood that private enterprise wasn’t the adversary of the public good. It was one engine for improving the public sphere.” This view gets to the heart of the conflict between the marketplace and community needs.
Business growth creates jobs, and businesses often contribute to local nonprofit institutions. They can grow when the government provides social and economic conditions that sustain that growth. As businesses expand, they do generate more money in circulation if they hire more employees whose wages allow them to improve their quality of life.
At the same time, businesses have greater infrastructure needs that the government provides. Those needs include transportation services such as better roads, more buses or rail lines, more police and fire services, and more parks and affordable housing. These needs cannot be met without revenue to fund them.
Schultz and other critics argue that taxing the wealthiest leads the government to waste money without solving societal problems. Schultz recognizes that chronic homelessness, budget deficits, and declining public-school outcomes “aren’t unique to the state—but Washington’s response to them is.”
His solution, like others’, is not taxation but rather reform or improvement of performance management, and if pursued, it would generate growth and prosperity for all. This description is as utopian as believing that once workers take over the factories, i.e. the means of production, all class differences are eliminated.
No organization, private or public, operates perfectly without internal systemic problems. The key difference is that public institutions are accountable to the public, whereas private institutions are accountable only to their shareholders or a few owners. When citizens, either directly through initiatives or through representatives in government, raise taxes on the wealthiest, they understand the need for public revenue to address societal problems that the owners of private businesses may not address.
Consequently, they not only vote for higher taxes when there is adequate information to represent all sides of the proposal, but they also vote with their feet. The flow of workers and entrepreneurs into the market increases rather than declines when adequate government revenue is available to meet societal needs.
A large excerpt from Squire’s article follows, providing data that show this trend is real.
The myth that taxes send millionaires fleeing by Gregory D. Squires
Available empirical evidence disputes that infringement on the prerogatives of private capital will cause industry to leave a city or state.
Some anecdotes of wealthy families moving away have garnered attention, but the overwhelming pattern of millionaire mobility (or lack thereof) indicates no aggregate loss of such households. For example, 2,400 millionaire households moved out of New York state between 2020 and 2022. But 17,500 such households moved into the state, according to a 2023 report of the state’s Fiscal Policy Institute.
In 2022, Massachusetts created a 4% surtax on income over $1 million. Opponents argued it would lead to an exodus of millionaires, but in the subsequent two years, the number of millionaires in the state increased 38.6%, and the state collected over 2 billion additional dollars in funding, according to a 2025 report by the Institute for Policy Studies (IPS). In 2022, the state of Washington announced that it would be increasing its capital gains tax from 7% to 9.9% in 2025. Between 2022 and 2024, the number of millionaires grew from 463,000 to more than 681,000, according to the IPS study.
But the deepest dive into the evidence of this issue is provided by Cristobal Young in his 2018 book “The Myth of Millionaire Tax Flight.” He studied Internal Revenue Service tax data from everyone in the U.S. who filed a million- dollar tax return between 1999 and 2011, a total of 45 million tax returns from 3.7 million individuals. For an international perspective, he examined data from the Forbes list of the world’s billionaires, revealing where they were born, how often they moved after becoming wealthy and how tax rates shape where they live.
The basic findings were the following: Millionaires tend to live in states with the highest tax rates, including New York, California, New Jersey, Massachusetts and Washington, D.C. Millionaires move less often than the general population and far less often than poor households. The vast majority of billionaires live in the countries where they were born, with around 5% moving to another country after they have accumulated their wealth. Revenues generated by higher taxes on the wealthy who do not move far outpace the revenue lost by those who do move.
Young persuasively argues that for millionaires and billionaires, places are “sticky.” Critical to the accumulation of wealth is the social capital they develop over time. Colleagues, collaborators, funders, clients and other local contacts are critical. They create what he refers to as a home-field advantage. These are resources that people cannot take with them should they decide to move.
So, millionaires and billionaires remain in the places where they have made their wealth and plan to do so in the future. He notes that when people move, they tend to do so early in their careers, when they are not wealthy but hope to be someday, or when they retire and no longer plan to earn higher incomes.
Perhaps the most important policy issue is the following question: Does the revenue gained from higher taxes exceed the revenue lost when millionaires move? Young shows that a 1% increase in the tax on millionaires is associated with a 0.2% loss of the millionaire population, with those who leave taking $2.4 million with them. But the 99.8% of millionaires who remain would contribute an additional $176 million in revenue. A 10% millionaire tax would lead to a loss of $24 million from out-migration but an increase of $1.8 billion in revenue from those who remain.
Higher taxes on the wealthy do not constitute a magic bullet to resolve all the development challenges our communities face. But contrary to the mantra of that Montgomery County Council, and so many others in key public and private sector positions, it belongs in the community development toolbox.
As Young concludes: “The greater issue is that we are living in an era of rapidly rising inequality and diminished market opportunities for many. If we are to return to a time of shared prosperity — where the dividends of a productive society are enjoyed by many — millionaire taxes are part of the policy solution.”
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