Maryland millionaires’ massive migration.
There is a glaring inaccuracy in the linked WSJ article on vanishing Maryland millionaires. Essentially, It is not “a two-minute drill in soak-the-rich economics:”
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.
It is a one-minute, fifty-second drill in soak-the-rich economics. I was curious, and timed myself reading it aloud. Admittedly, I talk quickly sometimes, but I made it a point to try to pace myself for this one.
Otherwise, it’s an article that’s almost brutal in its simple accuracy. The refusal of fans of progressive taxation to understand that there’s a direct correlation between how much people hate progressive taxes and how much they suffer from them – and that people reserve the right to either stop being so productive, or just simply go somewhere else – would be sad, except that too many of said fans have a say in crafting fiscal policy. This is really kitchen economics: if there’s not enough money, stop spending it until there is. Even if it’d be really, really great if [Insert Feel-Good Initiative Here] was done.
And, speaking as a Marylander, I would appreciate it if Governor O’Malley stopped driving away our state’s wealthiest individuals; particularly before we reach the point where I’m one of them by default.
Crossposted to Moe Lane.