Skip to comments.Those missing millionaires
Posted on 12/28/2010 10:47:21 AM PST by Graybeard58
The left-leaning Institute on Taxation and Economic Policy and right-leaning Wall Street Journal editorial page are debating the whereabouts of thousands of missing millionaires. It seems that whenever a state government imposes a big tax increase on high-earning or wealthy taxpayers they're not always one and the same revenue projections turn up catastrophically wrong because the so-called millionaires are nowhere to be found.
For example, Maryland expected to raise $106 million in 2008 by increasing the income-tax rate on high earners from 4.75 percent to 6.25 percent. Instead, "taxes paid by rich filers fell by 22 percent, and instead of their payments increasing by $106 million, they fell by some $257 million," the Journal's editorial page observed March 17.
More recently, the Journal revisited the Maryland experience by way of Oregon. "In 2009 the state legislature raised the tax rate to 10.8 percent on joint-filer income of between $250,000 and $500,000, and to 11 percent on income above $500,000," the Journal noted Dec. 21. "Instead of $180 million collected last year from the new tax, the state received $130 million."
During the same period, the number of high-end filers declined from 38,000 to 28,000. That's where ITEP jumps in.
"There is a much simpler explanation for this discrepancy," it said in a Dec. 22 paper. "These 10,000 taxpayers earned less than the Legislative Revenue Office expected in 2009 as a result of the economic recession, and therefore fell below the income threshold at which the new brackets took effect."
Hmmm. All of them? So the Journal was wrong when it pointed out in March, "A lot of rich people have two homes," and not a single tycoon was moved to declare himself a legal resident of Florida?
What the tax-increasers and class-warfarists never seem to understand is that everybody rich, poor and those in the middle makes financial decisions based on rational evaluations of their circumstances.
A few years ago, a study found a poor person living in Connecticut, lacking skills and education, would have to earn $14 an hour by working to match the benefits, in cash and services, he received through various public-assistance programs. He's not lazy or stupid; quite the opposite. By not working, he's making a rational economic decision based on the fact he couldn't earn $14 an hour in the work force.
Of course, if those welfare benefits were withdrawn, he'd have to move to a state where welfare benefits were more generous or the cost of living was commensurate with the amount he could actually earn in a job. Such a circumstance would result in a better life for him and a lighter burden on taxpayers.
Is it any wonder wealthy people and high earners again, not necessarily one and the same respond in much the same way to economic stimuli and impositions by government?
This year, Connecticut lawmakers and the new governor, Dan Malloy, will have some tough decisions to make regarding taxes, spending and entitlements. They should be wary of solutions that send them down the same paths Oregon, and Maryland before it, followed, to their eventual dismay.
rich, poor and those in the middle
makesShould make financial decisions based on rational evaluations of their circumstances.
Ping to a Republican-American Editorial.
If you want on or off this ping list, let me know.
The first state that slashes corporate and personal taxes will have tons o’ cash!
Why can’t politicians agree to the 19% of GDP (or 28% GDP Fed, state, and local)? Cause historically that’s what the figures are. (You cannot break Hauser’s Law)
Thanks for the ping Graybeard. YES, agree, they SHOULD.
Paybacks are a bitch.
Appropriate reference material here: http://www.actionamerica.org/taxecon/ticktick.shtml
It probably won’t be long before states like Maryland take a page from the Federal playbook.
When a US citizen renounces citizenship or a green-card holder repatriates, he must immediately pay Federal income taxes on all unrealized capital gains and Federal income taxes on worldwide income for a couple of years thereafter. This is in keeping with the 4th plank of the Communist Manifesto.
Maryland could do the same when its tax-avoiding millionaires move to, say, Texas.
The Waterbury Republican-American is among the most conservative on line newspapers in the U.S.
I have 120 names on my ping list for their editorials, which are always conservative.
Read "Atlas Shrugged" by Ayn Rand.
actaully, that is not really true. If Hauser’s law was true, it would be evident in other countries or always evident in the US. But it is not.
Hauser’s law is therefore not an iron law of economics, merely an interesting coincidence in the postwar american economy.
and you also have to remember that marginal tax rates only tell half the story about taxes collected-—tax deductions, credits and loopholes are the other half when you have to look at revenues. You could have very high tax rates, but you could offer a plethora of deductions and credits, and therefore have in fact much lower taxes. Or you could have low tax brackets, but have higher taxes because you don’t allow deductions or loopholes.
I don’t think he was really asking a question. LOL!
I don’t think he was really asking a question. LOL!
Just coincidentally, of course, the census just showed that states without an income tax have had population gains.
I wonder where all of those high earners are going....
A couple of years back the state legislature (Illinois) tried to raise the income tax from 3% to 4%. They tried telling us common folk that it was only a 1% increase. That's what you call democrat math.
Ministry of Plenty Bookmark.
Grrrrrrrrrr. Its not like those of us conservatives here in Oregon didn’t SCREAM to high Heaven about this PRECISE result.
We told the idiots, raising taxes makes EVERYONE so much poorer. Those who can will LEAVE the state. Duh. So will Businesses. Duh.
Their answer, oh well if we don’t get this tax increase we will have to cut schools blah blah blah and the teachers union was 100% behind it.
Yea, so Oregonians, when you are looking at who to blame.... Look at the Teachers Union which so heavily supported the tax increases which have resulted in what?.... having to close schools. Not necessarily because of funding issues, but also because of population issues. Lots of people have left the area to find better work.
THANKS OREGON TEACHER UNIONS! YOU SUCK! ahem
I am not crowing about being right about this. I am astonished at just how surprised some of the morons living here are about it all. They are totally baffled! HELLO!! I just shake my head, because it just seems so obvious to me...
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