Maryland's millionaire exodus
Expatriation. It鈥檚 happening. Thousands of people are picking up stakes and leaving. They鈥檙e leaving their high-tax home states.
鈥淚鈥檓 outa here. I鈥檝e had enough,鈥� said a friend at dinner last week. 鈥淸Maryland Governor] 翱鈥横补濒濒别测 thinks he can tax us all he wants. But I don鈥檛 have to put up with it. I can move. We bought a place in Florida.
鈥淗e probably thinks it doesn鈥檛 matter. What鈥檚 a single taxpayer, more or less? That鈥檚 not going to change the outcome of an election. But I鈥檓 taking my business with me. I鈥檒l set up shop in Florida. I don鈥檛 have to be in Maryland. I can get crab cakes in Miami 迟辞辞.鈥�
What had set him off was an article in The Wall Street Journal. 鈥淢illionaires Go Missing: Maryland鈥檚 fleeced taxpayers fight back.鈥�
The WSJ:
Governor Martin 翱鈥横补濒濒别测, a dedicated class warrior, declared that these richest 0.3% of filers were 鈥渨illing and able to pay their fair share.鈥� The Baltimore Sun predicted the rich would 鈥済rin and bear it.鈥�
However, there were two things that Maryland politicians didn鈥檛 count on (1) a world-wide economic crisis decreasing the number of million dollar earners and (2) millionaires simply leaving (or taking in less income). 鈥淏y April 2009, one-third of the millionaires have disappeared from Maryland tax rolls. 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 鈥� even at higher rates.
What the WSJ failed to mention was that 6.25% isn鈥檛 the end of it. There are local taxes too. And in Baltimore City and Montgomery County, for example, the additional local taxes bring the total take up to nearly 10%.
If you have $100,000 of taxable income, in other words, you pay almost $10,000 for the dubious privilege of living in Baltimore rather than, say, some low-tax city in the Sunbelt.
In our own business, we have an office in Baltimore and one in Florida. We can鈥檛 move our entire business to Florida, but more and more we hear from employees in Baltimore who want to move to Florida. So the business moves鈥rganically, naturally. And when we create new businesses we put them in Florida, rather than in Maryland.
We already see the results of this and similar policies in Baltimore. People who create wealth tend to live outside the city鈥r move out. In the city limits, zombies have taken over 鈥� with a high percentage of cities鈥� populations on government payrolls or various forms of welfare. They鈥檙e less interested in creating wealth than they are in redistributing it to the shuffling, mouth-breathing masses.
The city鈥檚 largest employer, for example, Johns Hopkins, is a private institution. And a great one, from what we鈥檝e heard. But it is hardly independent of the zombies. Much of its research and operating budgets are funded by the government.
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