A New York Times obituary of Richard Jenrette, a co-founder of the Wall Street firm Donaldson, Lufkin, & Jenrette, mentions "the high-ceilinged octagonal library at Edgewater, his six-columned home built in 1824 on a Hudson River peninsula just north of Poughkeepsie in Dutchess County, N.Y. He bought the home in 1969 from the author Gore Vidal, who had done his writing in the library." The article goes on. "In Manhattan, his townhouses at 67 East 93rd Street and the adjacent No.69, which was his office, once belonged to George F. Baker, the New York banker who donated the money for the campus of the Harvard Business School." Then the obituary reports, "Ms. Howell, of the Preservation Trust, said Mr. Jenrette had regarded Edgewater as his primary residence."
And a front-page Times news article about the West Virginia U.S. Senate race begins, "Don Blankenship is running for the United States Senate as a proud West Virginian with Appalachian roots, but his primary residence is a $2.4 million villa with palm trees and an infinity pool near Las Vegas."
Why would someone with two Upper East side townhouses and lots of money declare Dutchess County as his "primary residence"? And why would someone running for Senate in West Virginia declare Nevada as his "primary residence"?
The Times doesn't get into it, but New York City residents pay a New York City income tax of 3.876% on all income above $60,000 a year. There have been elaborate cases about counting days and what house you hang your family pictures in and other things that lawyers and tax collectors can have fun arguing about, but if you consider yourself a Dutchess County resident rather than a Manhattan resident, you save yourself nearly 4% a year on your taxes.
Similarly, West Virginia has a state income tax of 6.5% on all income above $60,000 a year. Nevada has no state income tax. The closest the Times comes to explaining this to readers is a sentence that says, "Although Mr. Blankenship maintained in numerous court proceedings that his principal residence was Nevada, he still owns a home in West Virginia, in Mingo County not far from where he was raised. He said he paid property taxes in West Virginia but not income taxes."
These are good examples of why "millionaire taxes" proposed by state or local politicians don't often raise much revenue. Rich people are often both mobile enough and tax-savvy enough to avoid paying such taxes. Earlier coverage of this phenomenon at FutureOfCapitalism is here, here, and here.