May 27 2009
Taxing the Rich
A popular tactic of the Democrat party is to promote class envy. We need more tax revenue so let’s increase taxes on the wealthy. After all, they can afford it, and they need to pay their fair share. At least that is what they tell us. However, the rich, did not get to be rich by being stupid and just accepting whatever comes their way.
The Wall Street Journal published an enlightening story on taxing the wealthy that caught my interest, mainly because it concerned my state of Maryland. Like many states, Maryland has been having trouble balancing the budget. Governor Martin O’Malley’s (a Democrat) solution, implement a “Millionaire’s Tax” by raising the state income tax on anybody earning over $1 million. O’Malley asserted that this small percentage of Marylander’s was willing and able to pay the extra taxes.
The result, is that in 2009 there were 2000 returns filed by people who earned $1 million in 2008 compared to 3000 returns the previous year. This resulted in a decline of $100 million in taxes collected from those filers. They had predicted an increase of $106 million. Not exactly the desire result. Some of the decline can be attributed to the economy, but some can be attributed to people leaving the state due to the tax increase.
We hear everyday about the budget woes of the state of California. California has one of the highest state tax rates in the country (according to the Tax Foundation they were the 6th highest state for taxes). Wealthy Californians and businesses are leaving the state for more tax friendly locales like Nevada (49th in the country). The same can be said for New York where Rush Limbaugh recently announced he was leaving the state because of the ever increasing taxes in the state (#2 according to the Tax Foundation).
Increasingly, the rich (and I am far from being one of those folks) are being asked to be responsible for more of the load. If they are continually forced to pay more of their income in taxes, they will leave for friendlier climates. It is clearly happening on the state level leaving more of the burden to fall on the middle class.
