On yesterday’s Your World, Neil Cavuto ignored a study showing that the wealthy do not flee states with high taxes as he hyped the news that former French President Sarkozy is considering leaving France to avoid a 75% tax rate, and golfer Phil Mickelson is considering “drastic changes” due to higher taxes. Cavuto coyly outsourced the argument to his guest, Dave Maney, saying, “Dave Maney says Democratic leaders here in the United States better take note, if they have the money, they will run.”
Cavuto “asked,” “Do (Mickelson and Sarkozy) have a point?”
Predictably, Maney thought so. He said, “I think they definitely have a point. …When someone says, ‘We’re going to be taking 60-odd percent of your income between state and federal taxes,’ or in France when they say, ‘Hey, the state’s taking 75% of your income,’ people with the means to move will say, ‘You know what? There’s got to be a better, a place that would be happier to have me…”
Cavuto added, “That place has been Nevada for a lot of Californians. There’s been a, sort of a money flight from California for some time now. …In the case of Maryland, once they were going to see a surtax on millionaires that involved more than just millionaires. The government there didn’t see the revenues it anticipated and all but rescinded it.”
Maney said, “I hear it from those guys (entrepreneurs) in California all the time. Like, what are they doing to us?”
Cavuto did not point out - but should have - that a study from the Political Economy Research Institute at the University of Massachusetts, Amherst found that millionaires do not move away from states when taxes go up. As Think Progress noted, the study found: The evidence available in the research literature suggests that the worst fears of the policy debates over raising additional revenue from high-income households to sustain spending on public services are unlikely to materialize. The rich will not go on strike. They will not cease working, stop investing, or even move, but they likely will find ways to shift the timing and composition of their income in order to avoid paying taxes.
Instead of giving his viewers all the available information, Cavuto sold a myth.