Maryland Learns If You Tax Rich People You Get Fewer Rich People
From 2007 to 2010 Maryland had, at the behest of Governor Martin O’Malley, a “millionaire’s tax” which consisted of a 6.25% rate on people making more than $1 million/year.
How did that work out? Not so great. The millionaires left the state, and took their tax revenues with them to more friendly tax climates:
The study, by the anti-tax group Change Maryland, says that a net 31,000 residents left the state between 2007 and 2010, the tenure of a “millionaire’s tax” pushed through by Gov. Martin O’Malley. The tax, which expired in 2010, in imposed a rate of 6.25 percent on incomes of more than $1 million a year.
The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues. A county-by-county analysis by Change Maryland also found that the state’s wealthiest counties also had some of the largest population outflows.
In total, Maryland has added 24 new taxes or fees in recent years, Change Maryland says. Florida, which has no income-tax, has been a large recipient of Maryland’s exiled wealthy.
“Maryland has reached the point of diminishing returns. We’re taxing people too much and people are voting with their feet,” said Change Maryland Chairman Larry Hogan. “Until we change our focus from tax increases to increasing the tax base, more people are simply going to leave, leading to a downward spiral of raising revenues on fewer citizens.”
This is why federalism is a wonderful thing. When one state passes silly laws, Americans have the choice to move to another state.
The problem is that at the national level when politicians like Barack Obama start in with the tax hikes the choice to move to another country isn’t so easily made.Tags: maryland, Taxes