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Tax increasing = middle class suffering

Millionaires Go Missing - WSJ.com

Quote:

Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." 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 tax returns 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.

The Maryland state revenue office says it's "way too early" to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave

All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O'Malley's "fair share."

Hopefully, King Obama gets the message and gives us a break.

Re: Tax increasing = middle class suffering

Quote:

Originally Posted by NEPatriot (Post 1400345)

Millionaires Go Missing - WSJ.com

Hopefully, King Obama gets the message and gives us a break.

They didn't go missing, they acted rationally and moved to low tax/no tax states like Delaware,SC, Florida and/or Texas.....and claimed residence there.....Unless they inherited it, they didn't get rich by being stupid...

Re: Tax increasing = middle class suffering

I have seen my family's standard of living go down a bit in recent years. Well ... in that we are very spoiled in this country I am not going to cry about it. We were somewhere around the middle of the middle class and now I think we are just below that somewhere. But compared to many in this world we are very rich.

We live in a decent cape, we have 4 adults and 5 cars, both my older 2 go to college. We pay more than before for our healthcare but it's still there and we still choose our doctors. My 9-year old plays town soccer and I pay also for premier soccer for him. We buy what we want from the market and though we pay much in taxes we live a very free life IMO. too complain would be a sin IMO ... really ... anything more than the necessities in life is waste. We have more than we need so we have no right to complain and we won't and I won't.

Re: Tax increasing = middle class suffering

Maryland's state tax rates are not aggressively high, but their locality taxes in combination with the state taxes are.

Maryland also has a rate of 5.5% for 500K to 1M. I would suspect that you would find a good number of those making 1M in the 07 tax year falling to the ranks of those making 500K-1M in the 2008 year, and many of those making 500K-1M in 2007 falling to the ranks of the 300-500K earners in 2008. And so on.

It is worth remembering, when offering such trenchant insights as the OP has supplied from the WSJ, that Occam's Razor still applies.

Is it more likely that, faced with a 6.25% tax, a full third of a state's millionaires moved their families, houses, etc. etc. etc. to other states, away from whatever jobs they held, in the middle of a very bad recession in which finding new work is an iffy proposition; or is it more likely that such earners had lower taxable incomes, due to a historically precipitous drop in investment income, not to mention turmoil even among the higher-earning markets, such as finance?

My money, so to speak, would be on the latter.

PFnV