How Many Times... Mr. Speaker!

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."

Sorry for the obscure Howie Carr reference in the title, but jeez, how many times do governments have to fail at soaking the rich before they figure out it doesn't work. Sometimes I think you have to be an economic idiot to get elected to public office.

3 comments:

Terry Cowgill

11:42 AM

Apparently the results are mixed. Higher taxes will cause the wealthy to flee some locations and not others.

But in the case of Maryland, it's a no-brainer. Easy to move to nearby low-tax states like Virginia and Delaware and still be close to what drew you to the area in the first place. Not so easy to do in a place like California or New York.

Somebody ought to ask George Will why he still lives in Maryland after all these years.

Patrick Henry

11:47 AM

The interesting thing is that these high tax morons are proving our point left and right. Higher taxes do not lead to higher government revenues.

Give it to 2010 and I think we will find the mid-term elections to be interesting indeed. There is so much infighting starting to crop up among these folks that they will implode.

Jake

12:21 PM

Terry... higher incomes may not leave, but only if there are other things that force said incomes to remain in place. It is not because the tax rates don't always have impact on behavior.

If states can "afford" to raise taxes, they may be able to get away with it. But again, that doesn't mean they wouldn't be better off if they didn't (perfect case, New York City).

But government entities never look at it that way. They think that the number of taxpayers is static, and that if they increase revenue per payer, it will increase total income.

(BTW, it was really Ronald Reagan who brought this to everyone's attention. It was one of his many great contributions to the country.)

What they don't ever consider is that they operate in a competitive environment where tax payers are mobile and have "pricing options".

My point is that just because the "results are mixed" and don't result in some people leaving some places, it doesn't mean that the pricing dynamic doesn't exist everywhere (which you didn't say, I acknowledge, but the underlying article implies). What it means is that if politicians had any regard for that model, they would recognize that it would be better for themselves if they found the optimum tax rate rather than the ones most easily sold to the electorate.

But that of course assumes that they are smart enough to figure that out.