Wednesday, May 27, 2009

Where have all the millionaires gone?

Hmmm ... Last year, Maryland deliberately slapped an (even more) onerous tax on higher income state residents in order to try to soak up some of the red ink in which state books are awash. State politicians and newspaper editorialists basically gloated that the rick would suck it up.

How's that working out?
One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.
Some of the millionaires got chewed up by the recession, of course. Contrary to popular belief, the rich are not immune to bad times. But others ... Others headed for the hills -- or the sun, anyway.
The Maryland state revenue office says it's "way too early" to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It's easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: "Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it's easy for them to change their residency."
Wow. If you paint a target on people, they tend to head for the exits rather than stay and take it. Who ever would have guessed?

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Anonymous Anonymous said...

My best friends father-in-law did just that. He moved to Florida not long after this bill was passed and now spends the majority of his time and money in Florida on a golf course.

When you raise taxes high, those that have the means to move do so and the rest of us amke up the slack.

I wonder if anyone will ever say, maybe we should make the government smaller and we wouldn't need this extra money.

May 28, 2009 10:05 AM  

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