When Oregon was debating its permanently higher income taxes on business and high income household, proponents of the higher taxes said that only Big Out-of-State Banks would be affected. In fact, its the home-grown businesses--both profitable and unprofitable--that are hit hardest.
Now, one of the most vocal advocates of the new permanent tax increases is backtracking on the higher taxes. Apparently, he is worried that Oregon will be perceived as unfriendly to business.
Oregon is not a pioneer in soaking businesses and "the rich" to fund an ever growing government. Maryland tried the same thing and found out that the higher taxes actually reduced tax revenues. (So it seems there really is a Laffer Curve). From the Wall Street Journal:
A Bank of America Merrill Lynch analysis of federal tax return data on people who migrated from one state to another found that Maryland lost $1 billion of its net tax base in 2008 by residents moving to other states.
Oregon's tax advocates point out that the recession probably knocked off Maryland's millionaires. That is partially true but, in fact, many of the missing millionaires have simply disappeared from the state:
One-in-eight millionaires who filed a Maryland tax return in 2007 filed no return in 2008. Some died, but the others presumably changed their state of residence. (Hint to the class warfare crowd: A lot of rich people have two homes.)
Stayed tuned for more.
No comments:
Post a Comment