Tax Rates Matter to Scientists

A recent paper by Ufuk Akcigit and Salome Baslandze examined the effect of tax rates on the mobility of "superstar scientists" -- the top 1% of inventors with the most valuable patents -- found that countries enjoyed a "26% increase in foreign superstar inventors for each 10 % decrease in top marginal tax rates."

What this means is that top performers (in this particular case, scientists who can do their work in lots of places) tend to move from locations that tax their earnings heavily to places that tax them lightly. This is the same basic economic reason that people are moving out of  high tax states like California and New York to low tax states like Florida and Texas.

Sometimes the empirical evidence of basic economic principles is complicated, but the principles are rather simple -- and predictable.  If you want top talent to stay in your country, don't drive them away with high taxes.