A new report says wealthy Maryland residents may be moving out due to recent tax hikes – a finding that is sure to escalate the battle over taxing the American rich.
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.”
The finding adds to the renewed debate over raising taxes on the wealthy. In New Jersey, Gov. Chris Christie recently vetoed a millionaire’s tax passed by his legislature, while California and other state governments are also considering higher taxes on high earners to fix budget problems. President Obama on Monday asked Congress to extend tax cuts for those making $250,000 or less – effectively increasing taxes for the higher earners.
Many contend that higher taxes drive out the highly mobile rich, who can simply move to a lower-tax state or even lower-tax country. Recent data shows that a record 1,800 Americans renounces their citizenship last year.
Read more here:If you enjoy the content at iBankCoin, please follow us on Twitter