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| Economy |
| Maryland Millionaires Go Missing |
| 2009-05-27 |
| Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it." 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. No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here). 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." All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O'Malley's "fair share." |
| Posted by:Fred |
| #8 to only layoff people who do not work Can't do that. Those people are protected by quotas or unions. |
| Posted by: Glenmore 2009-05-27 21:38 |
| #7 companies should be encourage to only layoff people who do not work and/or pay taxes. This would keep the tax revenue high during recessions. |
| Posted by: airandee 2009-05-27 15:01 |
| #6 They are not moving. Not as many are making the high incomes anymore. This is what happens when the top 10% of earners pay 70+% of income taxes. IRS tax revenue falls along with taxpayers' income Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says. When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. "It illustrates how severe the recession has been." For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago. Via InstaPundit |
| Posted by: ed 2009-05-27 10:35 |
| #5 Some of the loss of income may be because people are earning less, due to the recession and market losses. The obvious solution there is to tax what they would have made under ideal conditions. After all, when the legislators budgeted the spending, they assumed that the growing economy would continue to grow, so the rich people should pay for it. |
| Posted by: Rambler in Virginia 2009-05-27 07:48 |
| #4 The obvious solution: prevent them from leaving! When freedom gets in the way of the important things, then it needs to be reduced. Ah, yes, been done before. Bounding a person to the land for production while others run and operate what passes as government management. |
| Posted by: Procopius2k 2009-05-27 07:32 |
| #3 ...Don't laugh - a week or so back, I read an article (and it may have even been here at the 'Burg) where one state faced with the same situation suggested that they would send the people who moved tax bills anyways for the amount they would have paid if they had stayed. No more out there than anything else... Mike |
| Posted by: Mike Kozlowski 2009-05-27 06:26 |
| #2 Nah, simply consficate their wealth, all money is the Government's anyway, we just get to use it for a short while. (Sarc) |
| Posted by: Redneck Jim 2009-05-27 05:20 |
| #1 The obvious solution: prevent them from leaving! When freedom gets in the way of the important things, then it needs to be reduced. |
| Posted by: gromky 2009-05-27 04:46 |