Today’s Wall Street Journal has an interesting article on what has happened in Maryland since they ‘raised the taxes on the rich’. According to the article:
“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 taxreturns 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.”
We need to look at the states as testing grounds for the consequences of government policies. When you raise taxes, revenue goes down. This has been proven statistically (see The Laffer Curve: Past, Present, and Future at Heritage.org). The article at Heritage was written in June of 2004 and still holds true.
New York State is experiencing a loss of high-income people because of changes in their tax policies, and Maryland is doing the same. Our state governments need to learn how to cut spending and lower taxes–not increase spending and raise taxes.