Do Minnesotans Move to Escape the Estate Tax?

The weight of the evidence points to a strong yes

Preview:

In 2001, Congress repealed the state death tax credit.  For a long time this credit had effectively paid state death taxes on behalf of estates from the federal treasury, meaning the state tax posed no additional burden to estates.  Without the credit, state death taxes pose a substantial burden, and so most states abandoned them. States that retained their death taxes began to quickly feel competitive pressure to lower or eliminate them. For these states, the most hotly debated question over the tax is whether people move their legal residence to avoid it.  This question is particularly important for Minnesota because the state’s estate tax makes Minnesota an expensive outlier. 

So, do people move to avoid Minnesota’s estate tax?  Unfortunately, there’s no reliable empirical research available to answer the question. Without good empirical research, policy decisions to reform or eliminate the estate tax must be based on other types of evidence. Still, the evidence laid out in this report does strongly suggest some Minnesotans move to avoid the estate tax.

A full copy of the report can be viewed here.