The Oregon Ducks will compete for the national championship early next month, so they’ve had a good season. Unfortunately, Oregon’s government isn’t doing nearly so well. Politicians approved a big tax hike on those bad, evil rich people in 2009, and Oregon’s spite-filled voters approved that measure earlier this year.
So how’s is Oregon’s class-warfare approach working? Not surprisingly, the politics of hate and envy is generating poor results. Revenues are much lower than forecast, as anyone with a rudimentary understanding of the Laffer Curve could have explained. The most noteworthy result is that about one-fourth of rich taxpayers have disappeared. Does the name John Galt ring a bell?
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.
As the Wall Street Journal opines, Oregon politicians are getting just what they deserve.
In 2009 the state legislature raised the tax rate to 10.8% on joint-filer income of between $250,000 and $500,000, and to 11% on income above $500,000. Only New York City’s rate is higher. Oregon’s liberal voters ratified the tax increase on individuals and another on businesses in January of this year, no doubt feeling good about their “shared sacrifice.” Congratulations. Instead of $180 million collected last year from the new tax, the state received $130 million. The Eugene Register-Guard newspaper reports that after the tax was raised “income tax and other revenue collections began plunging so steeply that any gains from the two measures seemed trivial.” One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did. Funny how that always happens. …The tax wasn’t enacted into law until June 2009 but was retroactively applied to January 1, 2009. So for the first half of the year wealthy Oregon residents weren’t able to take steps to avoid the tax ambush because they didn’t see it coming. This suggests that a bigger revenue loss from tax mitigation strategies will show up on tax return data in 2010 and 2011. …All of this is an instant replay of what happened in Maryland in 2008 when the legislature in Annapolis instituted a millionaire tax. There roughly one-third of the state’s millionaire households vanished from the tax rolls after rates went up. If Salem officials want to find where the millionaires went, they might start the search in Texas, the state that leads the nation in job creation—and has a top income and capital gains tax rate 11 percentage points lower than Oregon’s.
Welcome Instapundit readers. Your comments are greatly appreciated, particularly your real-world stories from your respective states.
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[…] Kingdom, Italy, France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
[…] United Kingdom, Italy, France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
[…] United Kingdom, Italy, France, Spain, as well as Bulgaria and Romania. Or states such as Illinois, Oregon, Florida, Maryland, Washington, DC, and New […]
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[…] trigger another race. Only this time, it will be a contest to see how many productive people “go Galt” and leave the state. John Kass, a columnist for the Tribune, points out that the […]
[…] trigger another race. Only this time, it will be a contest to see how many productive people “go Galt” and leave the state. John Kass, a columnist for the Tribune, points out that the […]
It is frightening that these economic morons destroyed California by bankrupting it. Then they moved to Oregon to destry that state. Then they will move to Austin tx and go to work to destroy that state too. They are too stupid to ever look back and see what the outcome of their enslaving the populace of each state as they pass through it.
If the ‘rich’ states should pay the poorer states then California should be paying Oklahoma and not the other way around. The fed is already buying Californian bonds with my money! ‘Rich’ has to be definded by spending; like the mad spending of California of money they cannot ever collect. They have no idea how wealth is created.
[…] wealthy tax filers in Oregon over the next decade. … Also: regarding the same TWSJ column: John Galt Tells Oregon Politicians to Screw Off December 21, 2010 by Dan Mitchell The Oregon Ducks will compete for the national championship […]
One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did.
This only proves that three quarters of the tax payers who were subject to this tax hike have zero problems paying higher taxes. To me, this is disheartening and it shows that most people (more than 75% in this case) will PUT UP with such open class warfare nonsense.
Liberals have been enabled and emboldened by the behavior of these “go along, get along” folks….it must be difficult to pull out of a place just like that…especially when you have a family (which is very likely for these people here)
I hope that these stupid Oregonians vote for another tax hike so that they can be “even more fair”.
nice article post !!
I moved to Vermont 2 years ago after 29 years in N. h. Guess what” It’s much cheaper up here. Property taxes are one third, I pay no income tax as my retired income is low, insurance is lower, and prices overall are lower, e.g., I just paid less for 4 tires, including sales tax, than I would have paid in N.H.
Not to mention, tens of thousands of NH residents commute to work in evil Massachusetts and pay Mass state income tax. Add in poor services and a near police state and NH is a hell hole, as far as I’m concerned.
States like Texas pay less welfare benefits, for now. But as Texas becomes wealthier, meager welfare benefits in an economically ascending Texas are bound to outperform proportionately more generous welfare benefits in an economically descending Oregon. The better, in absolute terms, benefits will inevitably attract the moochers and their organizers, the useful idiots, to Texas.
That was what happened in Oregon and California. The wealth attracted the moochers and useful idiots and now the pendulum is swinging the other way as the wealthy are leaving.
But as all of America turns more towards the welfare state model, Uncle Sam will attempt to ensure that rich states pay their fare share to the poorer states. That is the process being played out now in Europe. European states which all more or less impose a more centrally planned redistributive welfare model amongst their citizens, find it morally indefensible to not extend the same welfare transfer practice across states within the European Union. The bureaucrats in Brussels are more than eager to increase their importance by organizing and permanently managing such a wealth transfer. Eventually, on their way to overall decline, the more productive Germans will gradually learn to accept a more permanent “compassionate” transfer of wealth to the less productive Greeks. The same fate awaits Texas vs. Illinois and California. Until the whole nation declines…
Growing at 1.5% in a world that grows 4.5% on average, welfare state “compassion” leads to a rather cruel outcome after 10-20-30 years.
But remember; history, perhaps not coincidentally, shows that more often than not, the end result of a once wealthy empire’s decline is: breakup.
In summary,
The production dis-incentives and complacency afforded by the Welfare State, is fundamentally incompatible with the growth rates needed to finance its entitlements, as promised by Hope and Change. Higher prosperity based on decreased incentives to produce is as much of a pipe dream as a perpetual motion machine generating energy out of nothing. Sorry to remind that it simply does not exist!
It is unfortunate, the lengths to which 10% of the population will go to in order to avoid paying 60%-70% of all the income taxes.
However, between
A) the Warren Buffets who would like to pay more tax but are reluctant to do so until everyone else does,
B) Those addicted enough to wealth and fame that they will forfeit a more modest retirement to the Carribean or Florida in order to keep producing even if they have to work January-February for Oregon, Feb-June for the Feds and July-August for real estate and sales taxes,
C) Those who work for the challenge and satisfaction of serving the public rather than compensation
There should be room to increase the tax by a few more percentage points to make up for the lost revenue.
But even if the revenue side of the equation does not pan out as intended, there are many positive aspects when people drop out of making iPads, 2TeraByte disks, mammography equipment, excavators, batteries, cheaper houses, cheaper cars, surgical robots etc.: They simply leave more room for the rest of us in the more or less finite pie of wealth available AND, at the same time, reduce our ultimate carbon footprint. What’s not to like?
It is unfortunate, the lengths to which 10% of the population will go to in order to avoid paying 60%-70% of all the income taxes.
However, between
a)the Warren Buffets who would like to pay more tax but are reluctant to do so until everyone else does,
b)Those addicted enough to wealth and fame that they will forfeit a more modest retirement to the Carribean or Florida in order to keep producing even if they have to work January-February for Oregon, Feb-June for the Feds and July-August for real estate and sales taxes,
c)Those who work for the challenge and satisfaction of serving the public rather than compensation
There should be room to increase the tax by a few more percentage points to make up for the lost revenue.
But even if the revenue side of the equation does not pan out as intended, there are many positive aspects when people drop out of making iPads, 2TeraByte disks, mammography equipment, excavators, batteries, cheaper houses, cheaper cars, surgical robots etc.: They simply leave more room for the rest of us in the more or less finite pie of wealth available AND, at the same time, reduce our ultimate carbon footprint. What’s not to like?
Washington is no better in a lot of ways than Oregon, or California. No state income tax is offset by increasing environmental regulation and loss of property rights. It’s just a matter of degree. The solution is not to jump from one bankrupt state to another, but to insure all the bastards go down.
If you want a real John Galt effect, then don’t move your high income business, but really go on strike and shutter it. I’m at retirement age, have lived all my life in California, have “retirement” property in Washington, and intend to liquidate my CA business rather than sell it, and then live up the complete proceeds while fishing on the Columbia, reading all those books I never had time for, and starving the beast as much as possible.
I’m leaving nothing for the looters. If you think this Tea Party movement will accomplish anything, you are dreaming. It’s too late my friends. But good luck anyway.
[…] John Galt Tells Oregon Politicians to Screw Off The Oregon Ducks will compete for the national championship early next month, so they’ve had a good season. […] […]
All I ask is that you all remember that not everyone in Oregon is a stone cold bluebleeding moron. These sappy idiots live in Eugene-Springfield, Portland, and Salem, and then F over the rest of the state, like the Rogue Valley and everywhere east of the Cascades, who have a hard enough time trying to keep what little we have.
But please, don’t bail us out. Just help us forcefully contain all these idiots into California.
Oregon here and just to give everyone a better picture: the liberals populate the Willamette Valley in droves. You get away from Portland / Salem area and the rest of the state is conservative.
Now having said that, please, please, please tell your senator or congressperson to NOT bail out Oregon when the crash comes. These left-wing idiots have to learn the hard way that their class warfare / socialist programs do not work.
This state needs to crash and burn before we can pick up the pieces and start over. The liberals in Oregon just elected to the governorship a prior governor that ran the state into the ground years ago. They …. elected …. him … again…. WTF is wrong with this picture? God help us all.
It’s highly improbable that a lot of people up and moved that fast.
What they did do was change the way they handle their income and assets to reduce their taxable income. Don’t pull as big a salary from the business as last year, leave the money in the business; invest more in tax-advantaged assets and less in fully taxable ones. And so on. You wind up with fewer household above a particular cut-point in taxable income, but they haven’t moved, they just reduced their taxable income below the level you’re looking at.
Over a multi-year period, some people WILL move; those who remain will still make choices that are economically inefficient but tax-efficient. Overall economic health will decline.
Willburr,
The data available so far indicate that Oregon lost precisely zero taxpayers overall
Sorry but the data you provided refutes that idea.
The data says that 500,000 and up lost 36% of filers while the next bracket down, 200,000 to 500,000 lost only 19%. If the loss of taxes was merely due to loss of income, the uppermost bracket should have the lowest change of any of the brackets.
Why? Because the upper bracket is infinitely thick. People in the upper bracket can loose millions of dollars in income but if they still earn more than $500,001 they still show up in the upper bracket.
E.g. Suppose the bad economy caused everyone to lose 25% of their income. People who previously made 100,000-125,000 would fall into the lowest bracket but people who previously made 125,000-200,000 would stay in the bracket. People who previously made 200,000-250,000 would fall into the lower bracket but people who made 250,000-500,000 would not. However, for those who previously made over 500,000 only those who previously made 500,000-625,000 would drop out of the bracket everyone else, including billionaires would remain in the upper bracket. Percentage wise, we should expect a much smaller percentage change in the upper bracket than any of the lower brackets.
Yet, we see a percentage change nearly double that of the bracket below. Now, (1) either there was a much higher percentage in the 500,000-625,000 range of the upper bracket than in the 200,000-250,000 range in the next lower bracket, (2) a lot of people in the upper bracket went broke in a big way dropping all the way from the top to the bottom or (3) a lot of those top filers just disappeared from the income tax rolls.
Also, from the perspective of revenue, loosing just a few multimillionaires reduces revenue more sharply than losing hundreds of lower income people.
A better breakdown would not be number of filers but rather percent change of total revenue per bracket. I think you will find that revenue of the top bracket fell much farther percentage wise than any other bracket. Again, the best explanation is that the people in the top bracket disappeared from the income tax rolls.
Is it any coincidence that the states with the worst budgetary woes are also liberal meccas of tax and spend policy? I think not. Economics, not coincidence.
SDN,
You’re absolutely right. It’s entirely possible that the Itep report in question is blatantly misreading the statistics in an effort to support the socialist agenda of their foreign overlords. Will Soros-khan stop at nothing?
…Oh wait, no. In fact, all the Itep report is doing is to reprint, in its entirety, the data that the Wall Street Journal is giving us only parts of. And it’s actually the WSJ that is just making things up by selectively examining the evidence. My bad.
Sarcasm aside, look at the data, then look at the way the Journal and the Itep report are explaining it, and tell me with a straight face that you think the Journal is being more honest about it. Or that the Journal is being even REMOTELY honest about it.
Gee, Wilburr, the conclusions wouldn’t have anything to do with the fact that Itep’s funding is a who’s who of Soros funding?
Perhaps the people who elect them are economically ignorant, but the politicians themselves are not. They know that high taxes decrease overall revenue. But class warfare and its related tax policy are the primary tools they use to get elected and to stay in office. I am in Illinois and am starting to seriously think of moving to either Indiana (staying close to home) or Texas (better weather).
Washington is close to a 50/50 red/blue state. Enough of these folks moving one state away can be enough to impact the next election.
When I moved my business from CA in 2000, I considered Portland, OR, but finally settled on Austin, TX. While I prefer the climate and atmosphere of Portland, I find that OR just isn’t accommodating to small business. Count 33 jobs now in TX that very easily could have landed on OR, but for its punitive tax and regulatory schemes.
Empirical evidence puts some actual numbers on the Laffer curve. For maximum total wealth, the optimal tax rate is about 25%, enough to defend the borders and uphold the law. For maximum government revenue, the optimum is 45%, so that’s where developed countries naturally cluster. Former outliers such as Scandinavia (55%) and the US (35%) are now converging on 45%.
The (once) great state of Illinois now is collecting less and less revenue from higher and higher taxes. But it truly excels at driving jobs out of the state. This spiral will not stop until policies change– but don’t count on it. I expect ILL -inois to be the first state to declare bankruptcy, not CA.
Easy there, Free State Project. Many of us NH natives were none too excited to see you FSP folks roll in like you were taking over the place. We like our free state just as it is, no projects required. Please keep your neighbors in mind before inviting the rest of the world to your New Utopia.
I just spent a year in Texas on a long term consulting assignment. The economy is dynamic and growing. In fact, over 1/2 the jobs that were created in the private sector last year – I know that’s not a big number – were created in Texas. The business friendly tax structure is very attractive to business owners.
A recovering hippie I know in Arizona told me a while back that he gives God 10% on Sunday and he figures the government ought to be able to get by on the same or less. I couldn’t agree more.
The key is to CUT SPENDING which means the invasive bureaucracy weeds in government must be ripped out by the roots.
One small problem with this post (and the Wall Street Journal editorial it depends on): it bears no resemblance to the facts.
The data available so far indicate that Oregon lost precisely zero taxpayers overall. In fact, the current tally is that there are MORE people filing taxes in Oregon than the bean-counters estimated before the passage of this tax hike. What appears to have happened is that a lot of people got poorer: see http://www.itepnet.org/pdf/or_wsjmigration_1210.pdf .
In addition, the claim that “one-third of Maryland millionaires left the state” has been disproved. Emphatically just wrong. See http://www.itepnet.org/pdf/MD_Millionaires.pdf .
So the data just doesn’t say what the Journal wants you to believe it says. We can argue about the theory behind it as well (voters didn’t ratify the hike until january of 2010, so why exactly would we expect people to flee in 2009?), but as a starting point I think you need to stop quoting the Journal’s claims approvingly. It’s just wrong on its face.
These last 2 years, federal and state governments (both parties are guilty but the dem’s more so) have discovered the limits of the ‘social contract’ in America. As a citizen, I’m perfectly willing to pay taxes in order to have national security and other public benefits like schools, police and fire. When we see the benefits crumbling (crappy schools, budget cuts for first responders) at the same time that taxes are raised, or govt is attempting to raise, the social contract itself begins to crumble.
The completely and utterly warped notion of ‘fairness’, which to the dem’s mean that somebody else should pay a higher % than them, is being rejected. The only truly ‘fair’ tax is one where everyone pays the same proportion of their income. Anything else penalizes those with higher incomes and in fact, is the opposite of ‘fair’. How much disposable income we have should be of no concern to the government. The government should be protecting our right to the fruits of our labor not continually eroding it. Liberals stopped believing in Liberty 50 years ago. Progressive equals wealth re-distribution at this point. Americans are getting tired of this shite.
This is why the left likes the death tax so much…the dead cannot flee.
[…] Government starts punishing the productive too much, the productive stops, well, being productive. Or they move: So how’s is Oregon’s class-warfare approach working? Not surprisingly, the politics of hate […]
In case no-one caught it: The Ducks are U of O which is in Eugene – not OSU in Corvallis (Beavers).
There are too many idiots in Portland who keep electing lying socialist scheisskopf’s like Sam Adams to actually believe they’ll ever figure out what a true market could be doing. No, they’re busy destroying what markets still exist within the city limits.
“Nothing is more portable than rich people and their money.”
Gailbraith(?)
Another liberal state that failed to listento Forrest Gump’s advice. AND to the person who suggested that states such as Texas will have to pick up the tab for states like Oregona nd Califirnia, et al, I say if only they’re still. They can opt as as the millionaires have done.
Another problem is that undocumented workers 😉 don’t pay income tax – and usually don’t pay property taxes. With no sales tax that means that in Oregon they don’t contribute to the state coffers at all. Yet thy create costs thru use of basic services (police, fire, roads, etc) and social services (Oregon Health plan, free lunches at school, teachers salary costs, etc). Of course, not PC to address. The town I live in has grown from 20,000 to 30,000 in the past 20 years and the Hispanic population has increased from 5 percent to 20 percent. It’s not simply a local issue though – Woodburn has massive Russian population, etc. And of course with the liberal team in power (at state, Senate, House, etc) levels not much is going to change. The saving grace is at least it’s starting to make Oregon look unattractive to Californians!
My family left our home of 8 years in Portland OR to return to TX in July of 2009 and never looked back. Yes it is a beautiful state and it has many good things to offer but the economic ignorance of the liberal population was just to much to endure. They repeatedly vote themselves tax increases. Its insane.
As the previous poster stated…”Its all fun and games sitting on the sidelines and laughing at the complete economic illiterates who attempt to manage the finances of the State of Oregon, until that state goes belly up.”
Am professional in Los Angeles with 30 years of practice. Over the past 5 years, a bundle of clients left California for Nevada, Washington and other friendlier climates. None minded paying some taxes. But then the taxes never stopped. And they were increasingly being used to support union pensions and endless state/city hiring.
None of those clients knew each other. But all reached a saturation point with California. We have a high income tax–essentially 10%. A high sales tax and even higher in LA County. The County of LA Dept of Building and Safety now even charges a “dishwasher connection fee” of $65, so all homeowners have to kill a day waiting for the “inspector” who knows less than the installer. Jaywalking and parking tickets are higher. Photo enforced ticket cameras are used for revenue even tho studies dispute if not disprove any safety benefit.
Its like being flogged all day for the increasingly dubious benefit of living here. Everyone who does not work is tended to, the state employees have great pensions and retire early, and I am supposed to keep working 6 days a week to support it all.
My ability to do even that is reduced every time a client leaves. And for that matter, every time any business, fed up with taxes, ridiculous lawsuits encouraged only in California, and endless workers comp benefits leaves.
The expressions of these former clients on doing business in states where they are not punitively taxed leave me envious.
Losing their individual spending and their businesses which for the most part, dribble out of Calif as well has done us no good.
Not sure who will be here to support the edifice of state employes retiring at age 50 so they can cash their pensions checks and peel grapes while I work to age 70. But from what I see, fewer and fewer big earners live here long. Lots of hollywood types live elsewhere too.
My kids are not all out of high school but when they are, I’m out.
When I was younger I was obsessed with living in Oregon (Eugene in particular), where the rest of my family relocated.
Now that I’m close to retirement, I wouldn’t even think of living in a state that taxes pension income (even New York doesn’t do that!) and buying a house in a state with very high property taxes to boot.
All Oregon is good for is our periodic sales tax-free shopping trips. Yes, it’s beautiful, but nothing has an infinite price tag.
One of our SVP’s moved across river to Vancouver (WA) last year (my employer has facilities in both states). The reason given was to be closer to PDX. But I suspect the real reason is the tax increase. At his level, a couple years of Oregon state income tax probably paid for his new $2M house.
“All we know for certain is that a point exist somewhere between 0% and 100% which serves as the tipping point for tradeoffs. We don’t have a means of calculating that point.”
-Shannon,
When revenues go down when tax rates have gone up, that would be a good place to start. The people who are rich (something I hope to be in the future) can, and DO, move.
The people who have mortgages in a bad market, or the low-skilled with a good job, are less able to re-locate.
That is why I want to be rich, so I can tell the busy-bodies to take a hike! (President and First Lady, Harry Reid, Madame Pelosi, can you hear me?)
Once you get outside of Multnomah County, Eugene and Corvallis, Oregon is politically quite a lot like Idaho. Our problem is that most of the people live in Multnomah County, which has, of late, unfortunately attracted a large number of wannabe SWPL folks. They make nice neighbors, love the arts and the physical beauty of Oregon, care passionately about humanity and are happily ignorant of how markets actually work. Right now they are busy trying to pass a new school bond in Portland, guaranteed to raise living costs enough to drive out families with kids in school.
Rinse and repeat, year after year.
Still, I’ll stick around.
The Pacific Northwest is still God’s country, and even the idiots in Salem and Portland can’t ruin that.
That’s why Obama wanted his $250,000 “millionaires” pay their millionaire taxes, so Americans would have no place to go, nowhere, not even Texas, to hide from his tentacles.
I’m actually considering relocating out west to be closer to friends and in the same time zone as lots of tech work, and it would be nice to see a sh-t ton of entrepreneurial refugees set up camp in Vancouver WA so I could theoretically live near work and not get soaked on income tax..
I left Oregon after I joined the Navy. my family have been life long residents of Oregon but now reside in Washington. I visited Oregon for thanksgiving and the liberal politics of the state left me anxious to get out. I don’t even recognize the “State” of my youth given its current political bent.
I’m a commercial RE broker in the Seattle area and I can confirm at least 3 sightings of wealthy Oregon tax refugees who are in the process of unloading their very substantial Oregon holdings and buying commercial RE here. I appreciate the yeoman efforts of the Oregon legislature in helping me buy sheepskins for my kids. God bless ’em and keep up the good work.
There is nothing quite so not-enlightening as seeing the results of progressive politicians policies. They never get it. The problem is really that conservatives don’t have anything other than the results in reality to hold up. Conservatives must have policies based on fairness, reality, and actually have something that tracks and controls government. Hence…you’re a wage slave and get a W-2, independent contractors or investors get their IRS 1099-MISC, recently worked? 1099-G if you’re getting unemployment. What is needed is the IRS Form 1099-GOV because kissing tax receipts and calling it “income, redistributed” then spreading it around without reporting is just plain wrong. IRS Form 1099-GOV. NOW!
“All we know for certain is that a point exist somewhere between 0% and 100% which serves as the tipping point for tradeoffs. We don’t have a means of calculating that point.”
Shannon, that is undoubtedly true, but experiments, such as this one in Oregon, do end up teasing out the Laffer Curve’s broad contours — at least for this time in that place.
And when the ‘high income’ earners left the state, how many jobs of the rest did they take with them? Probably, the brain trust in Salem won’t connect the dots when the rest of the tax structure takes the related hit. So, the last Fighting Duck to leave Corvallis, remember to turn out the lights.
To clarify:
The Texas income tax rate is 0.00% on all income levels.
The maximum allowable sales tax rate in any county is 8.25%, and it cannot be raised except through a Constitutional amendment.
Property tax rates are set by city and county, or by voting district for specific additional purposes (school district or community college, for example). They vary between 2.00% and 3.00% in total, assessed on the appraised value of the property.
[…] Ask Oregon. […]
“At that point, taxpayers in fiscally responsible states like Texas are going to be subsidizing the bailout of profligate states like California and Oregon via their Federal taxes.
Suddenly, not so funny anymore.”
Or not. The Fed may secretly buy CA and OR bonds to bail them out, but I wouldn’t look for a new Congress to do so in 2011.
A couple of points:
Firstly, there is a world of difference between the nominal tax rate set by politicians and effective or actual tax rate people actually pay. The actual tax rate is the nominal rate minus all the deduction, incentives, shelters, loopholes etc that various tax payers can take advantage of. E.g. back in the 70s the nominal highest tax rate was 70% but the tax code was so complex no one actually paid 70%. Back then Malcolm Forbes was the world’s richest individual and he paid zero income tax (and IIRC zero capital gains tax) for three years out of 10.
So, any calculation of either revenue or suppression of economic activity must start with puzzlingly out the real tax rate. That is very difficult to do.
Secondly, although the Laffer curve is undoubtably true in concept, no one has the foggiest notion what the optimum tax rate should be at any given time to accomplish any particular goal. All we know for certain is that a point exist somewhere between 0% and 100% which serves as the tipping point for tradeoffs. We don’t have a means of calculating that point.
And after building the wall to keep the millionaires in, then Oregon can protest that not enough illegal aliens make it to the state.
[…] was that only the rich would pay and that percent would be around 10% of income. Now, with the states in dire need of more revenue, it is popular to make the rich “pay their fair share”. […]
Austin, that’s what the author said, but in a cute way. 11% lower than Oregon is 0%.
[…] don’t know why cities and states haven’t learned why this doesn’t work. It doesn’t. It won’t ever until you do something stupid like try and forbid people […]
They should raise the rate to 20 % or 30 % and build a wall to keep the high income people from leaving the State.
Its all fun and games sitting on the sidelines and laughing at the complete economic illiterates who attempt to manage the finances of the State of Oregon, until that state goes belly up.
At that point, taxpayers in fiscally responsible states like Texas are going to be subsidizing the bailout of profligate states like California and Oregon via their Federal taxes.
Suddenly, not so funny anymore.
Well, all the rich folks in the Portland area have to do is move a few miles north into WA.. Zero income tax and relatively minimal tax on business (gross-receipts up to about 2% IIRC).. The question is, if the so-called rich fatcats are actually small-biz owners who will take their jobs with them…
Well, as the world’s smartest man once said, “It’s not about revenue, it’s about fairness.” I guess since it’s not about revenue, Oregon doesn’t really mind this small problem then.
Our liberal, progressive, socialist-Marxist politicians are very SLOW learners and are ECONOMIC ILLITERATES. Oregon is receiving EXACTLY what they deserve. \
Merry Christmas, Oregon. Reelect liberals.
Agree to the previous comment about moving to income and sales tax free NH. Just don’t show up expecting MA-level government benefits and services. Or worse, voting for a bunch of people intent on spending money we don’t have, and then complaining that we need an income tax.
If you want MA services and taxes, do us a favor and stay in Mass.
There is no income or cap gains in Texas.
Texas has a sales tax around 7% and a property tax.
Businesses do face a franchise tax based on revenues. But it is very small compared to other states’ income taxes.
[…] DAN MITCHELL: John Galt tells Oregon politicians to screw off. […]
We welcome all anti Income tax people the Free State of NH.
Income tax and sales tax free!