“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council

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Flight of Affluent Taxpayers Catches Up With New York

Justin Fox Bloomberg

Date Posted:: May 25, 2023

The rise in asset prices in 2020-21 shielded New York state from the consequences of the flight of higher income workers. @foxjust

The 2020-21 numbers here were released in late April by the Internal Revenue Service. They sort taxpayers by whether and where they moved between filing their taxes in 2020 and filing them in 2021; the adjusted gross incomes are for the 2020 tax year. It has been two years since May 17, 2021 — that year’s belated income tax filing deadline — and a lot has changed. But New York has continued to lose population, and if the trend depicted above were to continue, even in less extreme form, it would be disastrous for the finances of a state that relies on income taxes paid by those making $200,000 or more a year for almost half its revenue. That the loss of affluent taxpayers didn’t lead to disaster during the pandemic mainly had to do with how much the prices of stocks, houses and other assets rose in 2020 and 2021.

Takeaways by Macro Roundup^® AI

New York relies on income taxes paid by those making $200,000 or more a year for almost half its revenue, so continued outmigration of affluent taxpayers, even in less extreme form, would be disastrous for the state's finances.
IRS data released in late April sort taxpayers by whether and where they moved between filing in 2020 and 2021, with adjusted gross incomes reported for the 2020 tax year.
New York's loss of affluent taxpayers did not produce a fiscal disaster during the pandemic mainly because prices of stocks, houses and other assets rose in 2020 and 2021.

Ongoing State Tax Revenue Implications of the 2026 California Billionaire Tax Act

Jared Walczak California Tax Foundation

Date Posted:: April 28, 2026
Is Database:: Database

Walczak estimates the 2026 California Billionaire Tax Act would reduce annual state tax revenues by ~$3.53B to $4.49B due to billionaire departures and associated spillovers. The NPV of these ongoing losses would be several times the wealth tax revenue.

This paper estimates ongoing annual reductions in state tax revenue under scenarios based on announced and anticipated billionaire departures. The analysis considers direct impacts on individual income and, to a much lesser extent, sales tax collections, along with spillover effects. We identify 212 California billionaires using the Forbes billionaire list and classify each based on whether their wealth is primarily held in publicly traded equity, a privately held operating business, financial fund management, or a diversified mix of sources. We use classification-specific assumptions of income loss subject to a given billionaire’s departure, assuming that only 5% of public founders’ income will remain California source after a departure, compared to 55 percent for private operating business owners, 35% for financial management, and 15% for diversified wealth. Under our primary scenarios, the wealth tax yields ongoing reductions of $3.53 billion to $4.49 billion per year in income, sales, and other tax collections. Calculations based exclusively on the nine publicly identified billionaire emigres yield $2.77 billion in recurring revenue loss and can be regarded as a lower bound. Actual out-migration almost certainly already exceeds that which has been publicly reported, and continued departures should be expected should the initiative advance.

Takeaways by Macro Roundup^® AI

The authors estimate the 2026 California Billionaire Tax Act would cut state income, sales, and other tax collections by $3.53 billion to $4.49 billion per year under their primary billionaire-departure scenarios.
Limiting the calculation to the nine publicly identified billionaire emigres yields $2.77 billion in recurring revenue loss, which the authors regard as a lower bound.
The analysis classifies 212 California billionaires from the Forbes billionaire list and assumes post-departure California-source income of 5% for public founders, 55% for private operating business owners, 35% for financial management, and 15% for diversified wealth.

Massachusetts Loses Billions in Income After Millionaire Tax

Greg Ryan Bloomberg

Date Posted:: March 20, 2026
Is Database:: Database
Is Important:: Important

Net outflows of adjusted gross income from Massachusetts increased 8% y/y in 2023 to $4.2B, after a 4% surtax on income over $1mm took effect. Top earners leaving the state were responsible for 70% of the outflow.

Residents exiting Massachusetts took a net of $4.2 billion in adjusted gross income with them in 2023, one of the largest totals in the country, after a tax on millionaires took effect. The amount was an 8% year-over-year increase, according to Internal Revenue Service data, even as the total number of taxpayers leaving the state slowed. This was the first year that residents were subject to a 4% surtax on incomes over $1 million after voters approved the levy in 2022 to fund schools and transportation. Despite the tax’s implementation, the number of residents moving out of Massachusetts who reported income of $200,000 or more — the top bracket tracked in the IRS data — fell year-over-year. Net outflows from Massachusetts long predate the millionaires tax, especially to Florida and New Hampshire, its northern neighbor, which has no tax on wages or capital gains. Total lost income was also higher in 2021 than 2023. The state’s millionaires-tax collections have increased every year since 2023 and so far in fiscal 2026 have jumped 19% year-over-year to $1.3 billion.

Takeaways by Macro Roundup^® AI

Residents leaving Massachusetts took a net $4.2 billion in adjusted gross income with them in 2023, an 8% year-over-year increase and one of the largest totals in the country, according to Internal Revenue Service data.
The number of Massachusetts out-migrants reporting income of $200,000 or more, the top bracket tracked in IRS data, fell year-over-year in 2023, the first year of the voter-approved 4% surtax on incomes above $1 million.
Massachusetts millionaires-tax collections have risen every year since 2023 and are up 19% year-over-year to $1.3 billion so far in fiscal 2026, while net outflows to Florida and New Hampshire predate the surtax.

Who Is Paying for the 2025 U.S. Tariffs?

Mary Amiti, Chris Flanagan, Sebastian Heise, and David Weinstein Federal Reserve Bank of New York

Date Posted:: February 13, 2026
Is Database:: Database
Is Important:: Important

A FRBNY analysis finds that ~90% of tariffs’ economic burden was borne by American firms and consumers in the first 8 months of 2025. Between January and November, however, that incidence declined 8pp as firms reorganised supply chains.

94% of the tariff incidence was borne by the U.S. in the first eight months of 2025. This result means that a 10% tariff caused only a 0.6 percentage point decline in foreign export prices. The tariff pass-through into import prices has declined in the latter part of the year. That is, a larger share of the tariff incidence was borne by foreign exporters by the end of the year. In November, a 10% tariff was associated with a 1.4 percent decline in foreign export prices, suggesting an 86% pass-through to U.S. import prices. Given that the average tariff in December was 13% our results imply that U.S. import prices for goods subject to the average tariff increased by 11% (13 times 0.86) more than those for goods not subject to tariffs. These higher import prices caused firms to reorganize supply chains.

Takeaways by Macro Roundup^® AI

U.S. buyers bore 94% of the 2025 tariff incidence during the first eight months of the year, with a 10% tariff associated with only a 0.6 percentage point decline in foreign export prices.
Tariff pass-through into U.S. import prices declined later in 2025: in November a 10% tariff was associated with a 1.4% decline in foreign export prices, suggesting 86% pass-through.
With the average tariff at 13% in December, the results imply U.S. import prices for tariffed goods rose 11% more than for untariffed goods, prices that led firms to reorganize supply chains.

Supply and The Mam

Michael Cembalest J.P. Morgan

Date Posted:: February 5, 2026
Is Database:: Database

At ~15%, NYC has the highest combined city-state personal tax rate in the US, and the top marginal corporate income tax rate at 17.4%. The city also has the highest industrial, retail and multifamily property taxes per square foot of 10 major cities.

NYC has the highest combined city-state personal tax rate in the US and the highest all-in corporate income tax rate at 17.4% (state plus city plus MTA surcharge). According to the [Citizens Budget Commission], New York State is the highest tax jurisdiction in the US based on tax collections per capita and #2 on tax collections per $1,000 of personal income. NYC has the highest industrial, retail and multifamily property taxes per square foot of ten major cities.

Takeaways by Macro Roundup^® AI

New York City carries the highest all-in corporate income tax rate in the US at 17.4%, combining state and city taxes plus the MTA surcharge, along with the highest combined city-state personal tax rate.
The Citizens Budget Commission ranks New York State as the highest tax jurisdiction in the US by tax collections per capita and #2 by tax collections per $1,000 of personal income.
New York City has the highest industrial, retail, and multifamily property taxes per square foot among ten major cities.

Laffer Curves Are Flat

Rachel Moore, Brandon Pecoraro and David Splinter Joint Committee on Taxation

Date Posted:: January 28, 2026
Is Database:: Database
Is Important:: Important

JCT calculations suggest that properly constructed individual income tax Laffer curves are flat over wide ranges. Modeling shifting across business types and interactions btw various taxes under 2022 law, they find revenue is ~ constant for top rates btw 37% and 55%.

Laffer curves estimated with more realistic taxes are flatter, suggesting less potential revenue gains from top rate increases and a lower revenue-maximizing top rate. Standard simplifications miss meaningful behavioral margins such as shifting across tax bases and sectors. Interactions between federal individual income taxes and other taxes produce even flatter Laffer curves and smaller revenue gains from higher top rates. Panel A of Figure 2 shows how federal individual income tax revenues change as the top tax rate varies along the x-axis. With a broad base, total income enters the tax function as a single base, applying the top rate to all income even though much of it qualifies for lower preferential tax rates. With a narrow base, only wage income enters the tax function, which fails to apply the top tax rate to any capital income. The true tax base lies between the narrow and the broad base. The Laffer curve estimated using the tax calculator and true base reaches a more modest peak (only 1.3% more tax revenue) at a top tax rate of 47%. Notably, this additional federal income tax revenue is only about 0.1% of GDP. Relative to both the narrow and broad bases, the true base implies smaller potential revenue gains and a lower revenue-maximizing top tax rate.

Takeaways by Macro Roundup^® AI

A Laffer curve estimated with a tax calculator and the true tax base peaks at a top rate of 47%, yielding only 1.3% more federal individual income tax revenue, about 0.1% of GDP.
The true tax base lies between a narrow base covering only wage income and a broad base applying the top rate to all income, and it implies smaller potential revenue gains and a lower revenue-maximizing top rate than either.
Standard simplifications omit behavioral margins such as shifting across tax bases and sectors, and interactions between federal individual income taxes and other taxes produce flatter Laffer curves with smaller revenue gains from higher top rates.

California’s Billionaire Tax Plan Will Backfire

Michael Moritz Financial Times

Date Posted:: January 13, 2026
Is Database:: Database

In 1950, sales taxes accounted for ~60% of California’s revenue, and personal income taxes accounted for 11%. In recent years, the personal income tax share has risen to ~60%, with the top 1% of California taxpayers responsible for ~40% of the revenue.

In 1957, Fairchild Semiconductor, the company that spawned Silicon Valley, was formed by eight men — only one of whom was born in California. At the start of that decade the state’s population was about 10.5mn and only about 11% of its revenue of $1.1bn came from personal income taxes. The sales and use tax (levied on products not services) accounted for almost 60%. Today, California’s population is about 39.5mn while its budget is about $320bn (not including the $174bn the state receives from Washington for social welfare programmes). Since 1990, the budget has grown at an average rate of 6% a year. Compared to the 1950s, the source of the state’s revenue has entirely flipped. In recent years personal income taxes have contributed more than 60% of the total. This revenue rests on a foundation of jelly. In 2022, the top 1% of California taxpayers — just 170,000 payers — coughed up about 40% of all the state’s personal income tax revenues. Worse still, these payments are highly contingent on unpredictable capital gains.

Takeaways by Macro Roundup^® AI

In 2022, California's top 1% of taxpayers — about 170,000 payers — paid roughly 40% of the state's personal income tax revenues, payments that are highly contingent on unpredictable capital gains.
California's revenue mix has flipped since the 1950s, when personal income taxes supplied about 11% of $1.1bn in revenue and sales and use taxes nearly 60%; in recent years personal income taxes contributed more than 60%.
California's budget has grown at an average 6% a year since 1990 to about $320bn, excluding $174bn received from Washington for social welfare programmes, with population up from about 10.5mn in the early 1950s to about 39.5mn.

The rise in asset prices in 2020-21 shielded New York state from the consequences of the flight of higher income workers. @foxjust

Does the loss of affluent taxpayers threaten New York's revenue?

Takeaways by Macro Roundup® AI

Walczak estimates the 2026 California Billionaire Tax Act would reduce annual state tax revenues by ~$3.53B to $4.49B due to billionaire departures and associated spillovers. The NPV of these ongoing losses would be several times the wealth tax revenue.

How much state tax revenue would billionaire departures cost annually?

Takeaways by Macro Roundup® AI

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Net outflows of adjusted gross income from Massachusetts increased 8% y/y in 2023 to $4.2B, after a 4% surtax on income over $1mm took effect. Top earners leaving the state were responsible for 70% of the outflow.

Does a millionaire surtax accelerate income leaving the state?

Takeaways by Macro Roundup® AI

Related Articles:

A FRBNY analysis finds that ~90% of tariffs’ economic burden was borne by American firms and consumers in the first 8 months of 2025. Between January and November, however, that incidence declined 8pp as firms reorganised supply chains.

Are U.S. buyers bearing most of the cost of tariffs?

Takeaways by Macro Roundup® AI

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At ~15%, NYC has the highest combined city-state personal tax rate in the US, and the top marginal corporate income tax rate at 17.4%. The city also has the highest industrial, retail and multifamily property taxes per square foot of 10 major cities.

Does New York City impose the highest taxes among major US cities?

Takeaways by Macro Roundup® AI

Related Articles:

JCT calculations suggest that properly constructed individual income tax Laffer curves are flat over wide ranges. Modeling shifting across business types and interactions btw various taxes under 2022 law, they find revenue is ~ constant for top rates btw 37% and 55%.

How much revenue would raising top tax rates actually generate?

Takeaways by Macro Roundup® AI

Related Articles:

In 1950, sales taxes accounted for ~60% of California’s revenue, and personal income taxes accounted for 11%. In recent years, the personal income tax share has risen to ~60%, with the top 1% of California taxpayers responsible for ~40% of the revenue.

How dependent is state revenue on a small group of taxpayers?

Takeaways by Macro Roundup® AI

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