IDEAS home Printed from https://ideas.repec.org/a/aea/aejpol/v15y2023i2p424-66.html

Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy

Author

Listed:
  • Enrico Moretti
  • Daniel J. Wilson

Abstract

We contribute to the literature on the effect of taxes on the locational choices of wealthy individuals by examining the geographical sensitivity of the Forbes 400 richest Americans to state estate taxes. Though we find billionaires' effective tax rates are only about half the statutory rate, their residential choices are highly sensitive to these taxes, as 35 percent of local billionaires leave states with an estate tax. This tax-induced mobility causes a large reduction in the aggregate tax base. Nonetheless, we find that the revenue benefit of an estate tax exceeds the cost for the vast majority of states.

Suggested Citation

  • Enrico Moretti & Daniel J. Wilson, 2023. "Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy," American Economic Journal: Economic Policy, American Economic Association, vol. 15(2), pages 424-466, May.
    • Handle: RePEc:aea:aejpol:v:15:y:2023:i:2:p:424-66
    DOI: 10.1257/pol.20200685
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200685
    Download Restriction: no
    File URL: https://doi.org/10.3886/E157481V1
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200685.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pol.20200685.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/pol.20200685?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mathilde Muñoz, 2021. "Do European Top Earners React to Labour Taxation Through Migration ?," PSE Working Papers halshs-03252899, HAL.
    2. Engelmann, Dirk & Janeba, Eckhard & Mechtenberg, Lydia & Wehrhöfer, Nils, 2023. "Preferences over taxation of high-income individuals: Evidence from a survey experiment," European Economic Review, Elsevier, vol. 157(C).
    3. Henrik Kleven & Camille Landais & Mathilde Muñoz & Stefanie Stantcheva, 2020. "Taxation and Migration: Evidence and Policy Implications," Journal of Economic Perspectives, American Economic Association, vol. 34(2), pages 119-142, Spring.
    4. Martinez, Isabel Z., 2016. "Beggar-Thy-Neighbour Tax Cuts: Mobility after a Local Income and Wealth Tax Reform in Switzerland," VfS Annual Conference 2016 (Augsburg): Demographic Change 145643, Verein für Socialpolitik / German Economic Association.
    5. López-Laborda Julio & Rodrigo Fernando, 2022. "Mobility of Top Income Taxpayers in Response to Regional Differences in Personal Taxes: Evidence from Spain," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 152-169, January.
    6. David R. Agrawal & Dirk Foremny & Clara Martínez-Toledano, 2025. "Wealth Tax Mobility and Tax Coordination," American Economic Journal: Applied Economics, American Economic Association, vol. 17(1), pages 402-430, January.
    7. Mathilde Munoz, 2019. "Do European Top Earners React to Labour Taxation Through Migration ?," Working Papers hal-02876987, HAL.
    8. Austin J. Drukker, 2025. "Internal migration and the effective price of state and local taxes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 32(1), pages 163-194, February.
    9. repec:hpe:journl:y:2025:v:253:i:2:p:91-127 is not listed on IDEAS
    10. Advani, Arun & Burgherr, David & Summers, Andy, "undated". "Taxation and Migration by the Super-Rich," CAGE Online Working Paper Series 630, Competitive Advantage in the Global Economy (CAGE).
    11. Benjamin Bridgman, 2025. "A Century of Super–Rich Longevity," BEA Papers 0135, Bureau of Economic Analysis.
    12. Mathilde Munoz, 2019. "Do European Top Earners React to Labour Taxation Through Migration ?," PSE Working Papers hal-02876987, HAL.
    13. Gordon H. Hanson & Enrico Moretti, 2025. "Where Have All the Good Jobs Gone? Changes in the Geography of Work in the US, 1980-2021," NBER Working Papers 33631, National Bureau of Economic Research, Inc.
    14. Richard Winter & Jan Zental, 2025. "Better Early than Never – The Effects of Anticipated Gift Tax Changes on Business Transfers," CESifo Working Paper Series 11687, CESifo.
    15. Baselgia, Enea & Martínez, Isabel Z., 2024. "Using Rich Lists to Study the Super-Rich and Top Wealth Inequality: Insights from Switzerland," CEPR Discussion Papers 18891, C.E.P.R. Discussion Papers.
    16. Rafael González-Val & Miriam Marcén, 2024. "Population growth and taxes: the effect of regional differences in the Spanish inheritance tax," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 73(1), pages 135-163, June.
    17. Ben Brewer & Karen Smith Conway & Jonathan C. Rork, 2022. "Do income tax breaks for the elderly affect economic growth?," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 7-27, January.
    18. Schratzenstaller, Margit, 2025. "Behavioral responses to inheritance taxation – A review of the empirical literature," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 238-260.
    19. Paudel, Nawaraj S. & Lahiri, Sajal, 2024. "Heterogeneity in the Effect of Size on Internal Migration in the United States: A Gravity Model and PPML Estimator Approach," EconStor Preprints 300726, ZBW - Leibniz Information Centre for Economics.
    20. Mathilde Munoz, 2019. "Do European Top Earners React to Labour Taxation Through Migration ?," World Inequality Lab Working Papers hal-02876987, HAL.
    21. Mathilde Muñoz, 2021. "Do European Top Earners React to Labour Taxation Through Migration ?," Working Papers halshs-03252899, HAL.

    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejpol:v:15:y:2023:i:2:p:424-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.