Seems that Maryland with its "millionaire tax" is losing its target tax base.
QuoteA 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.
http://www.cnbc.com/id/48120446
After running out of states for the rich to run to, out of the country may be next...
I hear Russia is nice this time of year and the wealthy aren't bothered with taxes so much. Ireland is so nouveau riche.
Maybe going to Ireland next year on a vacay. We also have talked about Russia and Poland. I'll look for the ex-pats.
Quote from: guido911 on July 09, 2012, 07:05:19 PM
Maybe going to Ireland next year on a vacay. We also have talked about Russia and Poland. I'll look for the ex-pats.
I worked in Ireland for some months, but it was long, long ago. I stayed in Abbeyfeale, a small town a few miles from the west coast. In the winter and early spring, the weather is most charitably described as 'changeable.' It would rain, then stop and the sun would come out. Half an hour later it was raining again, sometimes with gale force winds. I saw more rainbows in a day than I see in years here. The salmon and trout fishing is supposed to be world class. I dunno, but I ate a lot of salmon.
The country has a rich history, and they go to great pains to preserve it. I was in the midlands, rolling country fringed by mountains, when my friend spotted an unusual tower off in the distance. Celtic towers are round with a conical top. 'Norman' towers are square. This one was round but had odd horns sticking out at angles from the top. We worked our way cross country and found two kids near the base. One explained that clan such-and-such fought a fierce battle here against clan so-and-so. Basically, they erected the tower as a monument to two bunches of Irishmen beating the tar out of each other.
I was in Dublin for just one day. It's an interesting city full of ancient churches and other buildings. But I spent most of my free time in the country along the west coast from Listowel south to Tralee and inland through the Gap of Mohan and the Magillicuddy Reeks. Gotta love the names! And I could retire and live in Cork quite happily.
In the winter, the food was only so-so. There was lots of beef, lamb, and seafood, but little chicken or pork. Vegetables were winter types: potatoes, turnips, parsnips, and carrots. Fresh vegs had to come from Africa or the Middle East, and they were ridiculously expensive. I was dying for some pasta, and it was available only in a gourmet shop down in Tralee.
Oh, one of the biggest parties in Europe is the Rose of Tralee festival. I wasn't there for it, but locals told me the town closed and they had to park outside and ride buses into the city. They consumed a prodigious amount of alcohol. I was there for St. Patrick's Day, and I can believe it. Sullivan's pub in Abbeyfeale went through three times as much beer that weekend. Driving
anywhere was discouraged that day.
The country was a study in contrasts; beautiful countryside marred by burned out cars and trash. I really hope that's improved. But it was a poor country too. A trout stream went behind the house I was staying in, and the town had to prevent erosion by pounding derelict cars into the banks. It worked and it was undoubtedly cheap, but it was a horrible eyesore. Still, the wrecks held a lot of minnows for the trout to eat.
Quote from: Ed W on July 09, 2012, 08:39:15 PM
I worked in Ireland for some months, but it was long, long ago. I stayed in Abbeyfeale, a small town a few miles from the west coast. In the winter and early spring, the weather is most charitably described as 'changeable.' It would rain, then stop and the sun would come out. Half an hour later it was raining again, sometimes with gale force winds. I saw more rainbows in a day than I see in years here. The salmon and trout fishing is supposed to be world class. I dunno, but I ate a lot of salmon.
The country has a rich history, and they go to great pains to preserve it. I was in the midlands, rolling country fringed by mountains, when my friend spotted an unusual tower off in the distance. Celtic towers are round with a conical top. 'Norman' towers are square. This one was round but had odd horns sticking out at angles from the top. We worked our way cross country and found two kids near the base. One explained that clan such-and-such fought a fierce battle here against clan so-and-so. Basically, they erected the tower as a monument to two bunches of Irishmen beating the tar out of each other.
I was in Dublin for just one day. It's an interesting city full of ancient churches and other buildings. But I spent most of my free time in the country along the west coast from Listowel south to Tralee and inland through the Gap of Mohan and the Magillicuddy Reeks. Gotta love the names! And I could retire and live in Cork quite happily.
In the winter, the food was only so-so. There was lots of beef, lamb, and seafood, but little chicken or pork. Vegetables were winter types: potatoes, turnips, parsnips, and carrots. Fresh vegs had to come from Africa or the Middle East, and they were ridiculously expensive. I was dying for some pasta, and it was available only in a gourmet shop down in Tralee.
Oh, one of the biggest parties in Europe is the Rose of Tralee festival. I wasn't there for it, but locals told me the town closed and they had to park outside and ride buses into the city. They consumed a prodigious amount of alcohol. I was there for St. Patrick's Day, and I can believe it. Sullivan's pub in Abbeyfeale went through three times as much beer that weekend. Driving anywhere was discouraged that day.
The country was a study in contrasts; beautiful countryside marred by burned out cars and trash. I really hope that's improved. But it was a poor country too. A trout stream went behind the house I was staying in, and the town had to prevent erosion by pounding derelict cars into the banks. It worked and it was undoubtedly cheap, but it was a horrible eyesore. Still, the wrecks held a lot of minnows for the trout to eat.
Well crap Ed. I don't have to go now. I'll just reread this post and vacay vicariously through you. :) Good job...
Holy crap, Maryland had 31000 people that made $1000000 or more per year? And they all left!
Oh wait, the story talks about a net population loss of 0.5%... not people that would be effected or people making > $1mil per year. In other words... it is a tiny fraction with no correlation to the supposed catalyst even stated. Let alone any causation. Unless you are trying to drink whatever they are selling, that story says nothng.
Also, an alarming 0.00000001% of the population renounced their citizenship last year. No idea why, but leta throw in that number.
Really?
High taxes can drive people away, but this article says nothing. Whats more: nyc, portland, seattle... doing fine with high taxes. Better education, higher wages, better health, higher standard of living. The debate is not black and white.
Here's the underlying source of my posted article.
http://www.changemaryland.org/wp-content/uploads/2012/07/StateCountyTax.pdf
Here's more analysis:
QuoteAnnapolis, MD – Maryland accounted for the largest migration exodus of any
state in the region between 2007 and 2010, with a net migration resulting in
nearly 31,000 residents having left the state. Where did most of them go?
Virginia. Virginia is now home to 11,455 former Marylanders, taking $390
million from the tax rolls during this three-year period.
The Old Dominion can claim these former Maryland revenues as part of its
expanding tax base. Following Virginia, Marylanders opted for North Carolina.
"What happens when you raise taxes and fees 24 times?," asked Change
Maryland Chairman Larry Hogan. "You get people voting with their feet
and moving to tax-friendly states." Since 2007, Governor O'Malley has raised
taxes and fees 24 times, taking an additional $2.4 billion out of the economy
each year according to a Change Maryland analysis based on state government
reports.
The analysis, from the non-partisan Tax Foundation, examines IRS tax
return data to determine where individuals are filing.
In the region, Delaware, Virginia and West Virginia increased the
number of tax filers. The District of Columbia and Pennsylvania lost
tax filers, although in these jurisdictions the loss was not nearly as
dramatic as in Maryland. The District lost just over 1,100, while
Pennsylvania lost just over 8,200.
Nationally, Maryland did not fair much better either. Maryland joins
high-taxed, rust belt states including New York, California, Michigan,
Illinois, Ohio and New Jersey among states with largest mass exodus
between 2007 and 2010. Maryland saw the seventh-highest negative net
migration after these states.
In all, Maryland lost $1.7 billion form the tax base due to out
migration during this three year period.
Background:
http://www.changemaryland.org/category/press-releases/
[
Emphasis added].
Yeah. No correlation.
Quote from: guido911 on July 09, 2012, 11:10:12 PM
Yeah. No correlation.
I suspect you would find a stronger correlation with a measure of median home price adjusted for the quality of schools. Most people simply can't afford to live in a good school district in many of our more populous states. Thanks to our relatively low land values/housing prices, we don't see much of that dynamic around here.
100% correct. Nothing you have posted or linked to has any data showing any correlation between taxing people making more than $1mil and people leaving the state. Here is your paradigm:
1) maryland taxed people 6% for each dollar earned over $1mil
2) 0.5% of marylands population moved away
3) therefore the tax drives away many millionaires.
You cannot logically reach that conclusion based on the points given. For all we know 31k homeless people left Baltimore. Maybe the navy base shut down? Maybe he state laid of 31k teachers and virginia was hiring (fyi: northern virginia is code for "DC Suburbs").
The data presented supports the contention than 31k people left maryland. It says nothing about why or if those people were rich.
By the most obvious measure, I don't really see it in the data:
(http://research.stlouisfed.org/fredgraph.png?g=8Cr)
Here is a link to a guy working on political districts in Maryland last year...
http://www.swingstateproject.com/diary/8528/maryland-population-shifts-by-state-senate-district
I don't know where these numbers come from. I read the report and it doesn't cite anything at all, however, according to the US Census Maryland had 5.65 million people in 2007 and 5.83 million in 2011, an increase of 180,000 people over the quoted period.
Three of those who left Maryland were my grandkids. Leaving jobs that paid a whopping $9.50 an hour. So, yeah...all the millionaires are leaving in droves!
Quote from: cannon_fodder on July 10, 2012, 07:54:43 AM
100% correct. Nothing you have posted or linked to has any data showing any correlation between taxing people making more than $1mil and people leaving the state. Here is your paradigm:
1) maryland taxed people 6% for each dollar earned over $1mil
2) 0.5% of marylands population moved away
3) therefore the tax drives away many millionaires.
You cannot logically reach that conclusion based on the points given. For all we know 31k homeless people left Baltimore. Maybe the navy base shut down? Maybe he state laid of 31k teachers and virginia was hiring (fyi: northern virginia is code for "DC Suburbs").
The data presented supports the contention than 31k people left maryland. It says nothing about why or if those people were rich.
The article says that the state lost $1.7 Billion of tax base as a result of these migrations. That lost tax base divided by the 31,000 migrants tells us that the migrants had an average income of $548,387 per person. Yes, maybe Maryland laid off 31,000 teachers... ;-)
Quote from: Oil Capital on July 10, 2012, 09:21:31 AM
The article says that the state lost $1.7 Billion of tax base as a result of these migrations. That lost tax base divided by the 31,000 migrants tells us that the migrants had an average income of $548,387 per person. Yes, maybe Maryland laid off 31,000 teachers... ;-)
Either that or 31,000 wealthy people from Maryland all opened Post Office boxes in New Hampshire and called NH their primary residence to avoid income tax in Maryland.
Quote from: Oil Capital on July 10, 2012, 09:21:31 AM
The article says that the state lost $1.7 Billion of tax base as a result of these migrations. That lost tax base divided by the 31,000 migrants tells us that the migrants had an average income of $548,387 per person. Yes, maybe Maryland laid off 31,000 teachers... ;-)
Odd then, that their per capita income did not decline much and indeed declined less than Virginia's. Or Oklahoma's, for that matter. Basically, they cherry picked years so as to use a national trend (the financial crisis) to make an otherwise unsupportable claim. Maryland's 2011 individual income tax collections were almost same as their 2007 level. Again, Virginia (and New Jersey, for that matter) has fared worse, lending further credence to the idea that this particular study is worse less than used toilet paper.
Looking at more data, I'm very confused. Maryland's total state tax collections increased 2% (ish) from 2007 to 2010. What loss is it these people were complaining about again? Remind me to never believe
any of the premises of the arguments put forth by anti-tax nutters. The entire foundation of their argument is utter nonsense to begin with. Tax troll is troll, I guess.
Just so I don't waste my time, the article was crap then?
On the other note, go to Ireland. Just went last year and it was crazy beautiful.
When in Dublin, take a private Guinness tour. Go online and get reservations.
Get out of Dublin after 1 or two days and see the country. We went SW and it was fan-damned-tastic. Rented a van.
Quote from: nathanm on July 10, 2012, 09:32:01 AM
Odd then, that their per capita income did not decline much and indeed declined less than Virginia's. Or Oklahoma's, for that matter. Basically, they cherry picked years so as to use a national trend (the financial crisis) to make an otherwise unsupportable claim. Maryland's 2011 individual income tax collections were almost same as their 2007 level. Again, Virginia (and New Jersey, for that matter) has fared worse, lending further credence to the idea that this particular study is worse less than used toilet paper.
Looking at more data, I'm very confused. Maryland's total state tax collections increased 2% (ish) from 2007 to 2010. What loss is it these people were complaining about again? Remind me to never believe any of the premises of the arguments put forth by anti-tax nutters. The entire foundation of their argument is utter nonsense to begin with. Tax troll is troll, I guess.
The "complaint" is very simple: they lost 31,000 high income taxpayers with a total tax base of $1.3 Billion. The fact that they may have had overall population growth and overall income tax collection growth in that time period does not contradict or take away from that fact in any way and really should cause no confusion.
As for your claim that they cherry-picked years to use a "national trend to make an otherwise unsupportable claim," with respect, that is nonsense. There was no national trend of out-migration caused by the financial crisis.
Quote from: Oil Capital on July 10, 2012, 11:40:16 AM
The complaint is very simple: they lost 31,000 high income taxpayers with a total tax base of $1.3 Billion. The fact that they may have had overall population growth and overall income tax collection growth in that time period does not contradict or take away from that fact in any way and really should cause no confusion.
Any chance you could provide links for your tax collection and per capita income numbers?
Where are the ChangeMaryland numbers coming from?
Quote from: Oil Capital on July 10, 2012, 11:40:16 AM
The "complaint" is very simple: they lost 31,000 high income taxpayers with a total tax base of $1.3 Billion. The fact that they may have had overall population growth and overall income tax collection growth in that time period does not contradict or take away from that fact in any way and really should cause no confusion.
That claim is not numerically possible. If it were true, Maryland's average income would necessarily have dropped unless they simultaneously added a smaller cohort of even higher income people (in which case, were I a Marylander I'd tell the folks who left "thanks for making room!"). By all such related measures I can think to look at, Maryland has improved relative to other states. If there were some Maryland-specific cause, you'd expect to see
some other state doing better than them by these measures.
Quote from: nathanm on July 10, 2012, 09:09:53 PM
That claim is not numerically possible. If it were true, Maryland's average income would necessarily have dropped unless they simultaneously added a smaller cohort of even higher income people (in which case, were I a Marylander I'd tell the folks who left "thanks for making room!"). By all such related measures I can think to look at, Maryland has improved relative to other states. If there were some Maryland-specific cause, you'd expect to see some other state doing better than them by these measures.
Back to mathematics 101 for you. ;-) There is no reason to assume that all other incomes remained stable. The claim is very much numerically possible in a non-static world, like the one in which we live.
Quote from: Oil Capital on July 10, 2012, 09:33:50 PM
Back to mathematics 101 for you.
Funny, I was going to say the same thing about you. There has not been enough population growth to offset the loss they claim if there were a spate of lower income (but still above median) people migrating to Maryland. Explain to me how it is numerically possible for their claim to be both true and meaningful in any way and yet all measures of wealth to have gone
up in Maryland. (there are some corner cases where the numbers could look like that, but I can't fathom why I would care that 31,000 people left and were replaced by people who are even wealthier)
Quote from: heironymouspasparagus on July 10, 2012, 09:05:12 AM
Three of those who left Maryland were my grandkids. Leaving jobs that paid a whopping $9.50 an hour. So, yeah...all the millionaires are leaving in droves!
$9.50/hr for 50 years without overtime is approx. $1,000,000. They can do it if they are young enough.
Quote from: nathanm on July 10, 2012, 09:38:18 PM
Funny, I was going to say the same thing about you. There has not been enough population growth to offset the loss they claim if there were a spate of lower income (but still above median) people migrating to Maryland. Explain to me how it is numerically possible for their claim to be both true and meaningful in any way and yet all measures of wealth to have gone up in Maryland. (there are some corner cases where the numbers could look like that, but I can't fathom why I would care that 31,000 people left and were replaced by people who are even wealthier)
You seem to be assuming that all people in Maryland have static incomes. The number that left (31,000) is a significant but not overwhelming number out of a population of 5.8 Million. It is entirely numerically possible for the remaining people to have increased their incomes by enough to cause the per capita income to go up, especially when combined with newbies' per capita income that is above the previous median. Not difficult at all. It does not require a "corner case" and it does not require those who left to be replaced by people who are even wealthier.
Quote from: Oil Capital on July 10, 2012, 09:55:59 PM
You seem to be assuming that all people in Maryland have static incomes. The number that left (31,000) is a significant but not overwhelming number out of a population of 5.8 Million. It is entirely numerically possible for the remaining people to have increased their incomes by enough to cause the per capita income to go up, especially when combined with newbies' per capita income that is above the previous median. Not difficult at all. It does not require a "corner case" and it does not require those who left to be replaced by people who are even wealthier.
Can you cite that?
:o
Quote from: Oil Capital on July 10, 2012, 09:55:59 PM
You seem to be assuming that all people in Maryland have static incomes. The number that left (31,000) is a significant but not overwhelming number out of a population of 5.8 Million. It is entirely numerically possible for the remaining people to have increased their incomes by enough to cause the per capita income to go up, especially when combined with newbies' per capita income that is above the previous median. Not difficult at all. It does not require a "corner case" and it does not require those who left to be replaced by people who are even wealthier.
Yeah, you need to read what was claimed about these people again. 31,000 is about 21% of the increased population. Again, relative to other states, Maryland is doing better. Unless you're arguing that rich people are also fleeing every other nearby state the numbers don't make sense as presented. Given that I'm talking about per-capita income, the immigrants would have to individually make as much as the people who left to keep the income figures the same. Not likely in a cohort of 144,000 when compared to a cherry picked 31,000.
Even if that is true, it proves the premise false, which is that high taxes are driving out high income earners. If you really want, I can go pull the IRS data. I'm pretty sure the breakdowns by state are posted on their website.
CNBC states that "The Change Maryland study found that the tax cost Maryland $1.7 billion in lost tax revenues."
http://www.cnbc.com/id/48120446
The change Maryland site says "In all, Maryland lost $1.7 billion form the tax base due to out migration during this three year period."
http://www.changemaryland.org/category/press-releases/ (bottom of 5.30.12 News Release, 4th article from top)
There is (I hope) a big difference between tax revenue and tax base. Clever misquote.
$1,700,000,000. / 31,000 = $54,838.71. Not $548,387.
Net population loss or net gain. Who to believe?
A population gain of 180,000
Quoteaccording to the US Census Maryland had 5.65 million people in 2007 and 5.83 million in 2011, an increase of 180,000 people over the quoted period.
would only need ($1.7 B/ 180,000) $9444. each to match the $1.7 B supposed tax base loss.
"Nearly 90 percent of Maryland's 5.8 million residents live in the densely populated corridor between Baltimore and Washington, D.C."
http://www.choosemaryland.org/factsstats/Pages/Population.aspx
Either of 31,000 or 180,000 is a small enough percentage of Maryland's population to probably not make much of a dent in the per capita income.
We need some honest information if we are to make any sense of this, if we even really care.
Quote from: Red Arrow on July 10, 2012, 09:45:31 PM
$9.50/hr for 50 years without overtime is approx. $1,000,000. They can do it if they are young enough.
Well, there ya go, then... that would be great if it didn't cost $1.5 million to merely exist for that time....
Quote from: nathanm on July 10, 2012, 10:15:06 PM
Yeah, you need to read what was claimed about these people again. 31,000 is about 21% of the increased population. Again, relative to other states, Maryland is doing better. Unless you're arguing that rich people are also fleeing every other nearby state the numbers don't make sense as presented. Given that I'm talking about per-capita income, the immigrants would have to individually make as much as the people who left to keep the income figures the same. Not likely in a cohort of 144,000 when compared to a cherry picked 31,000.
Even if that is true, it proves the premise false, which is that high taxes are driving out high income earners. If you really want, I can go pull the IRS data. I'm pretty sure the breakdowns by state are posted on their website.
Again, you are assuming that every extant resident of Maryland had income that did not rise. If that was true, then what you are saying makes sense. But there is no reason to assume that. There is simply no mathematical or numerical reason that you can't lose your top (very small) cohort of income, increase the remaining incomes (in the aggregate), and end up with higher per capita income.
There is a good point that is being missed here though. At some level, tax rates get high enough that those whom are targeted for the higher taxes will do whatever they can to avoid paying more taxes. Show me one wealthy person who doesn't try to limit their tax liability either via state of residence, funneling funds to various trusts, exploiting loopholes written into the tax code, or keeping business operations off-shore.
Either the folks who left were high enough income to matter, in which case modest income gains among the lower (but still above median) income cohorts would not be enough to offset the loss or they're not much above the median, in which case why does anybody care? Remember, Maryland overperformed relative to its peers.
All of this is beside the point anyway. There's simply no way the aggregate data can be construed to show some terrible issue created by the millionaire's tax.
Having pulled the Maryland SOI tables for 2007 and 2010, the number of returns with an AGI greater than $200,000 actually increased. I'd go higher on the income scale, but the 2007 data doesn't have a breakdown above $200,000 as the 2010 data does. Total income reported by the cohort also increased. If 31,000 people left, that's OK, they were clearly replaced either by people moving up the income scale or by migrants. We are a nation of movers, after all.
Conan, there is not any less of that activity now that the rich pay a far smaller share of their income than they did in the 70s. One would expect the opposite if tax rates really mattered in that respect. I guess we could reduce them to zero, but I'm not sure what that would really get us except a breakdown in civil society.
Quote from: guido911 on July 09, 2012, 09:36:35 PM
Well crap Ed. I don't have to go now. I'll just reread this post and vacay vicariously through you. :) Good job...
My experience was only a tiny part of what's available, Guido. One of my supervisors went for a walking vacation, going from one B&B to another each night, with meals in pubs. I'd love to do the same if only I could walk that far again.
BTW, there were billboards saying "Guinness is Good for You!" I tried to derive as much goodness as possible while I was there.