Conservative economists Arthur Laffer and Stephen Moore are predicting a mass exodus of wealth from New York and California because of the new tax law. But academics who have studied taxes and migration call the forecast "pure nonsense." In an op-ed in the Wall Street Journal headlined "So Long, California. Sayonara, New York," Laffer and Moore (who have both advised President Donald Trump) say the new tax bill will cause a net 800,000 people to move out of California and New York over the next three years. The tax changes limit the deduction of state and local taxes to $10,000, so many high-earning taxpayers in high-tax states will face a tax increase under the new code. Laffer and Moore say that the effective income-tax rate for high earners in California will jump from 8.5 percent to 13 percent; wealthy Manhattanites would face a similar increase. Those who make $10 million or more will see a potential tax hike of 50 percent or more, according to their analysis. They say those hikes will cause residents to move to lower- or no-income-tax states. "In years to come, millions of people, thousands of businesses and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states," they said. Connecticut, New Jersey, and Minnesota will lose a combined 500,000 people over the same period. Yet economist and sociologist Cristobal Young of Stanford, who co-authored the leading study on wealth and tax migration, calls the forecast "pure nonsense." He said that California, New York, and New Jersey have been high-tax states for decades and still have the highest per-capita concentration of rich people in the country. "There is no correlation between a state's top tax rate and the number (or rate) of millionaires in that state," he said. He added that the people most affected by tax rates are the "late-career working rich," and they are less likely to move because they are "embedded in place for a host of social and economic reasons," including the location of their companies and jobs, their social lives, charitable boards, and customers. Moore and Laffer say that 3.5 million Americans on net have moved from the highest-tax states to the lowest-tax ones. They add that high earners are the ones who have cost the states the most by leaving. Yet they fail to mention that very few of those 3.5 million were high earners. What's more, the number of millionaires in those high-tax states is actually growing, not shrinking. Since 2010, New Jersey has added 119,000 net new millionaires, for a current total of 3.3 million, according to the latest data from Phoenix Marketing. New York has added 305,000 new millionaires, for a total of 7.6 million. California has added a whopping 730,000 new millionaires since 2010, bringing its total to 13.4 million. That is not to say rich people haven't left these states—they have. High-profile emigres, such as David Tepper's move from New Jersey to Florida, give outsized publicity to such departures. Yet high-tax states are also creating the most wealth and producing more new millionaires than are leaving.

What's more, it's unclear that taxes are the chief reason people move from the Northeast to Florida. Despite Moore and Laffer's claim that the wealthy are the most tax-sensitive and are leaving in greater numbers, lower earners are moving more, usually for jobs or lower housing costs. Young's study, with Charles Varner of Stanford and Ithai Lurie and Richard Prisinzano of the U.S. Department of the Treasury, analyzed 13 years of income data for Americans earning $1 million or more. It found that only 2.4 percent of those million-dollar earners move each year, a rate lower than the 2.9 percent move rate for the broader population, and that only 0.04 percent move for tax reasons. So while some millionaires will relocate because of tax changes, history suggests high-tax states will likely continue to create more wealth than they lose. Here's what the new tax law means for your retirement.