Russel Sage Foundation

Over the past 30 years, the U.S. has seen an increasing share of national income going to the top one percent of earners. At the same time, there have been few substantial policy efforts to moderate rising inequality. While some states have passed millionaire taxes, federal tax rates on the rich have been decreasing for decades. Former President Trump’s 2017 Tax Cuts and Jobs Act (TCJA) bill directly cut taxes for the rich. It also made it more costly for states to tax the rich by limiting the federal deduction for state and local taxes. As this primarily impacts top earners in blue states, the passing of the TCJA sparked widespread concern that the rich will move to lower-tax states. Sociologist Cristobal Young will use the TCJA as a natural experiment to examine elite mobility or lack thereof in the wake of tax reform. Young will use confidential IRS tax return data to determine how many millionaires moved away from or moved into each state after the passage of the TCJA from 2012 to 2019. He will also determine the income revenue lost and gained for each state.