There is a proposal in Vermont to impose an income tax surcharge on incomes over $250,000. In a post about the proposal, Robert McClelland, an economist with the Urban-Brookings Tax Policy Center, writes, “recent research suggests taxpayers may be more mobile in response to higher taxes than was previously thought. High-income taxpayers with a lot of capital gains will have several methods to avoid the tax.”

Additionally, McClelland links to an interesting article from earlier this year by the economist David R. Agrawal. In the article, Agrawal surveys recent research on state and local income tax policy. He discusses how remote work and interstate commuting affect migration in response to income tax changes and how income tax sourcing rules affect mobility. He cites several studies indicating that increases in state income taxes increase out-migration: the “literature appears to show that taxes matter for the highest income individuals.”

I wrote about potential behavioral responses to Washington’s income tax here. Here is our report on the income tax, and here is our policy brief on I-645, which would repeal the tax.