Point/Counterpoint: Raise Taxes and People Move

Wishful thinking in Walworth County

POINT
Border communities hoping for more Illinois business. (Janesville Gazette, 9/18/2011)

Excerpt: Illinois' corporate tax rate is now the fourth-highest in the United States, according to the Tax Foundation. A 2011 report ranking state business tax climates ranked Illinois only slightly better than Wisconsin, but residents here believe the scale is beginning to tip in Wisconsin's favor.

"Illinois has given up a comparative advantage," said David Rasmussen, attorney and village of Walworth president.

"It's economically illiterate to raise taxes and think people aren't going to move."

Wisconsin's taxes remain higher, but people such as Rasmussen believe the similarities in taxes will force businesses to look elsewhere for advantages.

COUNTERPOINT
Studies: Rich Don't Flee High-Tax States. (NPR, 4/29/2011)

Excerpt: "If you're living in a state and your tax bill goes up by a thousand or two thousand dollars," he says, "that ... pales in comparison to what it would cost you to actually move. And it might not be worth it to have to be farther away from your job, farther away from your friends."

And Thompson says the stickiness of where you live is just as strong for those with higher incomes. In fact, they often have bigger houses, and businesses they can't move, and more ties to a community.

So why the persistent idea that the rich are ready to pack up at a moment's notice if state taxes get bumped up?

Part of it is the power of anecdotes.