Virginia keeps tax rates steady, Maryland raises them. Guess which one’s in surplus first?
Jim Geraghty at National Review Online brings us an interesting contrast between the two states that border Washington, D.C.:
Just days after Virginia Gov. Bob McDonnell announced a $544 million surplus, Maryland Gov. Martin O’Malley told county leaders Saturday that Maryland may need to increase taxes to solve a $1 billion budget gap next year.
What makes the contrast even more striking is the fact that McDonnell previously balanced an inherited $4.2 billion budget deficit that then Gov. Tim Kaine said could only be closed with a $2 billion tax increase while O’Malley has already signed the largest tax increase in Maryland history during his first term.
Both states benefit from the hiring spree and rare layoffs in the federal government, but the unemployment rate in Virginia is 6.1 percent while the unemployment rate in Maryland is 7.2 percent. (links original)
O’Malley made a direct comparison between his approach and that of the “obstructionist, economic saboteurs in Congress.” Given the results of his tax-hikes-begetting-tax-hikes approach to budget deficits — which yielded a flood of millionaires leaving the state — I don’t think he’s going to win that contest.
Btw, Politifact Georgia today rated “true” a statement that the proposed transportation sales tax, created by Georgia’s Republican-controlled Legislature and endorsed by its Republican governor, could be the largest tax hike in our state’s history.
– By Kyle Wingfield
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108 comments Add your comment
Cuious
August 23rd, 2011
5:13 am
Anybody know why the French Revelution happened? Tell me, please.
All you Great Americans; why haven’t you joined the Military? Show your love of Country.
Finally.Does anyone beside me think Lil Barry Bailout is the idiot?
Phil's Tel-A-Gramm
August 23rd, 2011
7:15 am
Lots of rambling there, Buck. Got anything worthwhile.
Henry Grady
August 23rd, 2011
11:45 am
Kyle-
So…the WSJ opinion page in a year’s time goes from saying “No doubt the majority of that loss in millionaire filings results from the recession” in 2009 to “Yes, a big part of that decline results from the recession that eroded incomes, especially from capital gains” in 2010 and that somehow validates your assumption of correlation for a mass exodus?
While there most certainly is SOME correlation, note that the WSJ article itself includes the calculation…1 in 8 who filed a return prior filed no return the year after…which means AT WORST the state lost 12.5% of its millionaires b/c of the tax…but certainly some died and others left for other reasons…a far cry from the 33% number trotted out earlier in the piece. The implication that this tax has created a mass migration seems to be misleading, at best, and a downright fabrication at worst.
Now if you want to take a real, statistical look at causal relationship b/w millionaires moving because of the tax rate, I suggest you get off the WSJ opinion page and go to this study…
http://www.stanford.edu/~cy10/public/Millionaire_Migration.pdf
Interesting findings to be sure.
Kyle Wingfield
August 23rd, 2011
12:09 pm
Henry @ 11:45: If you’re not going to respond to the specific, statistical point I raised in my last comment, why should I respond to you?
Henry Grady
August 23rd, 2011
5:26 pm
Well…for one, you’re the ‘expert’ here, so I would assume you would be more concerned with addressing inadequacies/inaccuracies in your opinion column than getting into some sort of battle of wills…but if you want to go tit-for-tat, that’s fine.
First, let’s be frank. Your ’specific, statistical point’ was based upon a ‘report’ that is neither cited nor explained in the WSJ column. We are just to believe the statement as fact based upon the report of the WSJ. (pssst…that’s called hearsay and wouldn’t be admissible in any sort of court proceeding, but no matter, you and the rest of the Internet can go right on regurgitating it).
Second, to quote the WSJ in the same article ..”the taxes paid by rich filers fell by 22%, …they fell by some $257 million” What I can’t figure out is why neither you nor the WSJ seem interested in actually reconciling this fact with the figure cited from the BOA/ML report of losing $1B of the net tax base. How big is the total net tax base, for example, would be a good start. What does ‘tax base’ include? Etc. Etc.
So…you’ve got the factual data that only 12.5% of the millionaires actually could have left. (Again, fact that doesn’t seem like a ‘flood’.)
You’ve got the factual data that the tax revenues by ‘rich filers’ fell by $257 M (Again, fact, and again that doesn’t seem like a flood considering the other factors).
How to fit your ’statistical point’ based upon an unknown and unseen report into these known quantities? That’s your problem…and you’re the one with a premise that seems to be undercut by the facts in the articles you cited. You’re first step might be to get your hands on the actual report before you starting throwing it out there third hand as backing for your underlying idea.
I’m not arguing that the migration wasn’t affected by the tax increase. I think that’s a pretty simple economic principle. The question is How Much was migration affected. Was it a “Flood”? I’ve cited two solid facts that are verifiable plus linked to a detailed report ..all of which says, millionaire migration was probably not heavily affected based upon the types of increases Maryland and New Jersey imposed. You cited hearsay from an opinion piece and seem content with that. With that, I give you the difference between opinion pieces and journalism.
Anyway, you get the idea. Feel free to take a look at what a well-sourced opinion column looks like over at the NY Times.
http://economix.blogs.nytimes.com/2011/08/23/what-the-rich-can-afford-in-income-tax/
Kyle Wingfield
August 23rd, 2011
6:08 pm
Henry:
If you want to base your argument on the speculation that the WSJ might have reported erroneously on the Merrill study, that’s your prerogative.
Everything else you wrote at 5:26 follows from that (misguided, imo) notion. We’ve already established that a large number of the reduction in millionaire filings had to do with the economy rather than migration. So, it is not at all contradictory to report that the study found the tax base fell by $1 billion due to migration, and that taxes paid in this bracket fell by a larger amount (i.e., $257 million) than one would expect strictly from the loss of that tax base. I don’t see the need to “reconcile” those figures.
That brings us down to a matter of opinions, since you concede some kind of link between the tax policy and migration. I call it a “flood” when one in eight members of a group chooses to move rather than comply with a new law. You don’t. Fine. That’s your opinion. But that’s also what I’d call your contention that you’ve somehow objectively undercut my argument with a non-contradictory “contradiction” and a report about what happened in a different state — an opinion, nothing more.
Henry Grady
August 23rd, 2011
7:24 pm
You, sir, are resting your case on a study you have never actually seen. You couldn’t give one detail beyond the non-detailed detail you have cited.
Go ahead. All I am saying is that a 12% migration doesn’t equal a flood, objectively or subjectively, except in your judgement.
artb
August 27th, 2011
8:28 am
What you didn’t mention is that McDonnell got acheived the surplus by borrowing against the state’s retirement fund. PURE REPUBLICAN FLAUDULENCE!