In light of President Obama’s exhortation to hike taxes on those making more than $250,000 a year earlier today, here’s a well-timed piece of evidence demonstrating what happens when you decide you’d rather engage in populist persecution and punish the wealthy for their economic contributions rather than make tough budget-cutting decisions. A new report indicates that the state of Maryland is bleeding residents and tax revenue — an emigration likely due to the wildly blue state’s recent tax hikes.
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.”
Yet again, one of the United States’ laboratories-of-democracy offers us another example of the results of poor public policy; in this case, desperately clinging to tax hikes on the wealthy as a solution to your problems (which, by the way, they aren’t): Raise taxes on the entrepreneurs, business owners, inventors, innovators, movers and shakers all you want, but you can’t reasonably expect that they’ll stick around to pay ’em. At some point, it’s going to become worthwhile for the moneymakers to jump ship. In 2011 alone, a record 1,800 individuals renounced their United States citizenship — and if that doesn’t provide a red flag about our tax code, I don’t know what does.
Here’s just one case in point that broke earlier today:
Denise Rich, the wealthy socialite and former wife of pardoned billionaire trader Marc Rich, has given up her U.S. citizenship – and, with it, much of her U.S. tax bill.
Rich, 68, a Grammy-nominated songwriter and glossy figure in Democratic and European royalty circles, renounced her American passport in November, according to her lawyer. …
By dumping her U.S. passport, Rich likely will save tens of millions of dollars or more in U.S. taxes over the long haul, tax lawyers say.