Patterico's Pontifications

2/17/2010

Tax Until No One is Left

Filed under: Economics,Politics — DRJ @ 7:57 pm



[Guest post by DRJ]

Dan Mitchell at BigGovernment wonders whether President Obama’s America will soon look like Corzine’s New Jersey, where high tax rates “helped cause wealthy people to leave the state, leading to a net wealth reduction of $70 billion between 2004 and 2008.” The reduction is reportedly a significant factor in New Jersey’s inability to balance its budget.

Mitchell quotes from a New Jersey Star-Ledger Business News article that says the trend will continue until New Jersey changes its tax policies:

“This study makes it crystal clear that New Jersey’s tax policies are resulting in a significant decline in the state’s wealth,” said Dennis Bone, chairman of the New Jersey Chamber of Commerce and president of Verizon New Jersey. … In New Jersey, the top 1 percent of taxpayers pay more than 40 percent of the state’s income tax, he said. “That’s probably why we have these massive income shortfalls in the state budget, especially this year,” he said. Until the tax structure is improved, he said, “we’ll probably see a continuation of the trend, until there are no more high-wealth individuals left.”

To progressives, isn’t this a feature rather than a bug? That is, isn’t equalization of everyone else’s wealth one of the goals?

Wealthy people left New Jersey because of high taxes but progressives may believe Americans won’t be willing or able to leave the U.S. to escape big spending and high taxes. They also think we’re sheep and that we’ll give in. I think they’re wrong.

— DRJ

30 Responses to “Tax Until No One is Left”

  1. There are two similar forces in California. One is upper middle class people leaving for other states. The other is the fleeing of rich Californian’s money to tax havens. People like Stephen Spielberg have their money protected in safe havens while his $25 million house can’t be moved. The really rich can protect themselves. It’s us middle class types who can’t afford Spielberg’s lawyers and accountants that are leaving.

    Mike K (2cf494)

  2. someone tell me please how can the assessment of the value on my modest new jersey home go up while market prices are declining???? (i know, i know)

    mln (6ebd69)

  3. One easy strategy for the rich: tax tourism. Got a few mill in cap gains to take and a 11% state income tax? Change your residence of record to that cabin you have in Alaska. Then take an extended overseas trip on the $300K you aren’t paying to CA or NJ. Sell your stocks whenever; you old state has no claim if you don’t live there.

    Next year you can “move back.” Or not.

    Kevin Murphy (3c3db0)

  4. Eventually all people who work will live in Florida and Texas; California and NY and NJ will be total welfare states.

    Patricia (e1047e)

  5. To progressives, isn’t this a feature rather than a bug?

    The very fact they label themselves “progressive” instead of liberal is just the beginning of their cognitive dissonance, otherwise known as talking out of both sides of one’s mouth.

    New Jerseyites must be quite leftwing to have allowed so much pro-Democrat-Party sentiment to dominate the state until the bitter end, in spite of, among other things, abusurdly high taxes triggered by the rocketing price of residential real estate. In that regard, folks in New Jersey are even worse than Californians, who have been somewhat shielded from soaring property taxes by the effects of Proposition 13 dating back to the late 1970s.

    Mark (411533)

  6. At least Joe Biden refuses to accept the idea that America is not going to lead the world economically in the 20th century, so we’ve got that going for us, which is nice.

    He’s the gift that keeps giving.

    daleyrocks (718861)

  7. As a Californian I’m more interested in knowing what percentage of our wealth has vanished to live in other states. I’m rather landlocked here. But more and more I think of taking the losses and getting off this sinking ship. When we do go bankrupt officially we lose our sovereignty. WE the people no longer make our own laws. And at present those who will step in don’t look at all promising.

    {^_^}

    [Note that this comment is by California JD, who is different than the Midwest JD that comments here. Welcome, JD-CA, and you might want to use another name so we can keep our JDs straight. — DRJ]

    JD (086936)

  8. Well, this CA native is seriously looking at property in NV away from Clark Co.
    The only thing that has kept me here this long is that my house was grandfathered by Prop-13 and is taxed at nowhere near its’ market value, and that any property in another state except 100-sq-ft of desert would be taxed more than I’m paying now.
    But, CA is on the ski-jump to disaster, and it is time to bail.

    AD - RtR/OS! (3742c3)

  9. I got a $2,000 a year raise last year. Sounds like a lot, but it works out to about $1 an hour increase. But, somehow, the taxes increased, the deductions for my health insurance jumped, and all told I’m actually making the same, or a little less, than last year.

    Without my raise, I would have seen a noticeable drop in my paycheck.

    This is “stimulus?” This is “progress?” This is “economic recovery?”

    In the immortal words of that great sage and philosopher Inigo Montoya…”I do not think that word means what you think that it means.

    Steve B (5eacf6)

  10. Ohio isn’t doing so great, either. In 33 years, we went from being 7th lowest taxed state to 5th highest. And, as John Kasich points out, people are fleeing Ohio as a result. Ohio stands to lose 2 electoral votes come the 2010 census due to all the “voting by feet” that has gone on over the last 10 years, but that is on top of all the other electoral votes lost due to all the previous “voting by feet” over the past 3 decades. Like I told my daughter, don’t come back to Ohio; there is nothing for you here.

    John Hitchcock (181b3b)

  11. err, make that 5th lowest to 7th highest

    John Hitchcock (181b3b)

  12. #174 on the NJ thread
    a darkly amusing by-product of California’s slow self-destruction is the ongoing migration of residents to states like Oregon and Colorado where the fugitives promptly start recreating the very conditions they were fleeing.

    a case in point would be the recent vote to raise taxes in Oregon against both “the rich” and “businesses” both of which will likely respond in predictable fashion by either moving or reducing their taxable income.
    Comment by redc1c4 — 2/17/2010 @ 6:29 pm

    figured it fit in well here, and my brilliance deserves to be seen twice…. %-)

    redc1c4 (fb8750)

  13. #9 Comment by Steve B — 2/17/2010 @ 10:56 pm

    For heaven’s sake don’t get Stashiu3 started on that movie.

    Machinist (9780ec)

  14. #13: i’ve never seen it: is it any good?

    redc1c4 (fb8750)

  15. NO!!

    Stashiu3 may differ.

    Machinist (9780ec)

  16. He has a thing about it.

    Machinist (9780ec)

  17. In reference to #12, your comments are often worth reading twice.

    Machinist (9780ec)

  18. Machinist originally hails from Philistia – it is an excellent movie !

    (grin)

    Alasdair (205079)

  19. Like increasing taxes on cigarettes caused an upswing in the rate of smuggling, increased taxes (as the wealthy flee, the less wealthy will become the target) will eventually cause a rupture in an American phenomenon; Americans voluntarily and, for the most part, honestly pay the taxes they are required to by law.

    This is unique on the planet. Every other country in the world has large amounts of tax-evasion and tax-cheating which is one reason why corruption in these countries is so endemic.

    We are unique in our willingness to pay ‘our fair share’ but this will soon change when;
    1) we no longer can pay
    2) we see that there are a large number of people who do not pay their fair share.
    3) the amount becomes blatantly oppressive and disproportionate.
    4) we realize how many others will/have stopped filing/paying and that the odds of prosecution have decreased.

    Once that happens, a cascade will begin that will put us in a situation like post perestroika russia where the official currency was pratically useless and barter and crime increased.

    But then, Barack says that’s just another conservative lie about a Bolshevik plot.

    jakee308 (a7c45e)

  20. #18,
    Maybe pearls before swine.

    Oink.

    Machinist (9780ec)

  21. People named JD tend to be handsome, brilliant, well-liked, and successful 😉

    JD (3065c0)

  22. Yeah, John Denver was that.

    John Hitchcock (716a4c)

  23. I grew up listening to John Denver. Good memories.

    JD (3065c0)

  24. Comment by redc1c4 — 2/17/2010 @ 11:38 pm

    Humming “Blinded By the Light” as he dons shades.

    AD - RtR/OS! (2215b9)

  25. Maybe cogitate on the plane hitting the building where an IRS office is in Austin, TX. May the peasants be revolting and willing to take out their government tormentors with them?

    Anyone want to draw the parallel with the scene in The Godfather Part 2 where Michael Corleone comments upon a rebel using a grenade to kill himself and a Cuban Major at a check point?

    I wonder how many government tormentors or Liberal Cultists have to be taken out before they realize this Socialist Government agenda has gone too far?

    PCD (1d8b6d)

  26. “…I wonder how many government tormentors or Liberal Cultists have to be taken out…”

    All of them!

    AD - RtR/OS! (2215b9)

  27. has there been any slowing in the run on guns and ammo that started in November ’08?

    redc1c4 (fb8750)

  28. Not really.

    AD - RtR/OS! (2215b9)

  29. I grew up listening to John Denver. Good memories.

    Aughhhhh! Mommy, make the bad man stop singing!

    Dmac (799abd)

  30. Was John Denver trying to hit that secret IRS building in the sea?

    Icy Texan (016cc7)


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