Tuesday, July 10, 2012
Higher Taxes Lead to ....
A new report says wealthy Maryland residents may be moving out due to recent tax hikes – a finding that is sure to escalate the battle over taxing the American rich.
The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a "millionaire's tax" pushed through by Gov. Martin O'Malley. The tax, which expired in 2010, in imposed a rate of 6.25 percent on incomes of more than $1 million a year.
The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.
In total, Maryland has added 24 new taxes or fees in recent years, Change Maryland says. Florida, which has no income-tax, has been a large recipient of Maryland's exiled wealthy. (http://www.cnbc.com/id/48120446)
One of the many problems that states have is that when they tax the wealthy the wealthy have the means to move. In general, if you are wealthy, you can and do take advantage of "loop holes" or legal means to not pay taxes.
When you have a job and depend on it for your income, you can't move to a cheaper tax environment. Plus you can't sell your home if you could find work elsewhere.
In many ways, a "fair tax" or flat tax with no or few deductions is fairer. People want services from their local, state or federal governments, but don't want to pay for them. If I didn't live in IL, I would prefer to pay more at the local and state level since theoretically they are more responsive to the individuals (not in IL since the dems control the state without any real opposition).
In many ways, government has gotten too big because :
"When the people find they can vote themselves money that will herald the end of the republic." Ben Franklin
“A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.”
― Alexis de Tocqueville