An insightful editorial from the Wall Street Journal examines how soak-the-rich taxes in Maryland backfired, leading to less revenue for the government. The politicians would like us to think this is just the effect of the recession, but the article points out that one out of every eight millionaires who filed a tax return in 2007 did not file one in 2008. A few may have died, but the big reason for this shocking reduction is migration. As one study discovered, Maryland’s tax base fell by $1 billion because successful taxpayers escaped to other states:
Illinois Governor Pat Quinn is the latest Democrat to demand a tax increase, this week proposing to raise the state’s top marginal individual income tax rate to 4% from 3%. He’d better hope this works out better than it has for Maryland. …The politicians in Annapolis had said they’d collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%—fifth highest in the nation. Liberals said this was based on incomplete data and that rich Marylanders hadn’t fled the state. Well, the state comptroller’s office now has the final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million. Yes, a big part of that decline results from the recession that eroded incomes, especially from capital gains. But there is also little doubt that some rich people moved out or filed their taxes in other states with lower burdens. One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008. Some died, but the others presumably changed their state of residence. (Hint to the class warfare crowd: A lot of rich people have two homes.) A Bank of America Merrill Lynch analysis of federal tax return data on people who migrated from one state to another found that Maryland lost $1 billion of its net tax base in 2008 by residents moving to other states. …Thanks in part to its soak-the-rich theology, Maryland still has a $2 billion deficit… The state’s best hope is that politicians in other states are as self-destructive as those in Annapolis.
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] if you’re guessing that the answer is New York, New Jersey, Maryland, Connecticut, or some other “blue state,” that would be wrong as […]
[…] Martin O’Malley’s horrible record in Maryland, I’m surprised that he hasn’t picked up more support from crazy lefties in the […]
[…] wrong thing and increase tax burdens on work, saving, investment, and entrepreneurship (and, sadly, these examples are more […]
[…] as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] Italy, the United States, and France) and from various states (Illinois, Oregon, Florida,Maryland, and New York) to argue that it is foolish to ignore the Laffer […]
[…] France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
[…] France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
[…] Italy, the United States, and France) and from various states (Illinois, Oregon, Florida,Maryland, and New York) to argue that it is foolish to ignore the Laffer […]
[…] these displays of government stupidity took place in Maryland. This is the state, after all, that crashed on the Laffer Curve, imposed regulations making it difficult for summer camps to protect kids from sunburn, and […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] glad when it happens to Illinois politicians. And British politicians. And Spanish politicians. And Maryland politicians. I could continue, but I think you get the […]
[…] we’re looking at Italy, France, or Spain. Or states such as Illinois, Oregon, Florida, Maryland, and New […]
[…] (England, Italy, the United States, and France) and from various states (Illinois, Oregon, Florida,Maryland, and New York) to argue that it is foolish to ignore the Laffer Curve. Not that it makes any […]
[…] Italy, the United States, and France) and from various states (Illinois, Oregon, Florida,Maryland, and New York) to argue that it is foolish to ignore the Laffer […]
[…] an exodus from Maryland following the imposition of some class warfare tax hikes (which simply confirms earlier analysis showing the same trend), and at no point was there any discussion about whether the state’s taxpayers had some sort of […]
[…] an exodus from Maryland following the imposition of some class warfare tax hikes (which simply confirms earlier analysis showing the same trend), and at no point was there any discussion about whether the state’s taxpayers had some sort […]
[…] around the world (England, Spain, and France) and in various states (Illinois, Oregon, Florida, Maryland, and New York) to make the case that it is foolish to ignore the Laffer Curve. Not surprisingly, […]
[…] around the world (England, Spain, and France) and in various states (Illinois, Oregon, Florida, Maryland, and New York) to make the case that it is foolish to ignore the Laffer Curve. Not surprisingly, […]
[…] […]
[…] that happens, Illinois politicians will get a lesson about the Laffer Curve, just as happened in Maryland, Oregon, and New York. Daniel J. Mitchell • January 11, 2011 @ 2:15 pm […]
[…] that happens, Illinois politicians will get a lesson about the Laffer Curve, just as happened in Maryland, Oregon, and New […]
[…] that happens, Illinois politicians will get a lesson about the Laffer Curve, just as happened in Maryland, Oregon, and New […]
[…] None of this should be a surprise. Maryland politicians tried to rape rich taxpayers a couple of years ago and they also crashed on the Laffer Curve. […]
[…] None of this should be a surprise. Maryland politicians tried to rape rich taxpayers a couple of years ago and they also crashed on the Laffer Curve. […]
[…] tax rates will boost work, saving, investment, and entrepreneurship. Higher tax rates, by contrast, discourage people from generating more […]
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