Wondering about Initiative 1098? Worried that the well-heeled with flee Washington for income tax havens like Wyoming?
If so, the folks at Economic Opportunity Institute have a couple of intriguing data points for you that are worth examining. The first is an analysis by Steve Roth at the Asymptosis blog showing that there’s no correlation between state income tax rates and the presence of millionaires, which you can express like so:
Go read the whole post here.
The second is also a scatterplot correlation, this time by Mike Kimel at the Presimetrics blog showing that high top marginal tax rates are slightly but positively correlated with high rates of GDP growth in subsequent years. Like so:
Read the full piece here.
Needless to say, none of this stuff is predictive. No one can say for sure how Washington’s richest 1 percent would respond to I-1098. But there does appear to be some decent statistical evidence to suggest that state income tax levels just don’t have much discernible effect.