Taxing billionaires: estate taxes and the geographical location of the ultra-wealthy by Erico Moretti and Daniel J. Wilson published by NBER (10/2019).“We study the effect of state-level estate taxes on the geographical location of the Forbes 400 richest Americans and its implications for tax policy. We use a change in federal tax law to identify the tax sensitivity of the ultra-wealthy’s locational choices. Before 2001, some states had an estate tax and others didn’t, but the tax liability for the ultra-wealthy was independent of their domicile state due to a federal credit. In 2001, the credit was phased out and the estate tax liability for the ultra-wealthy suddenly became highly dependent on domicile state. We find the number of Forbes 400 individuals in estate tax states fell by 35% after 2001 compared to nonestate tax states. We also find that billionaire’s sensitivity to the estate tax increases significantly with age. Overall, billionaires’ geographical location appears to be highly sensitive to state estate taxes…”
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