I keep hearing how the rich need to pay their fair share. I’m dying to know what that fair share is. What’s the magic enumerated amount that moves a productive person from the evil column to the fair column? I wonder what my own fair share is and if I could get it in writing, pay off the debt, and be left alone. It seems every day that fair share number seems to be moving higher and higher. Don’t kid yourself when it comes to taxation, because any increase in any tax has very real consequences.
WSJ reports of the great State of Maryland:
“Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. 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."”
What was the result? According to the article 1/3 of the state’s millionaires left the state. As a result, the amount of revenue raised by the state came in $100 million less than they did before they created their millionaire’s tax bracket.
NY saw a similar occurrence when a more progressive income tax was promised this year and Billionaire Tom Golisano uproot himself from NY to move to Florida as opposed to paying $14,000/day in state income taxes. How much must Golisano pay to the government before he’s reached his fair share and when you are busy calculating that how much is founding Paychex and creating over 7,000 jobs worth? How much is his millions in contributions to hospitals and colleges worth?
The problem when trying to soak the rich is that wealth is very mobile. It is not hard for the rich to move elsewhere and be rich somewhere else. It is not hard to switch from intelligent productive American workers to intelligent productive Indians. I know this for a fact having previously worked on efforts to outsource to India. As the economies of the world become more interconnected, how much harder will it be to hold wealth hostage to a burdensome tax system?
To phrase Governor David Patterson, the problem with NY was that “We made too many promises with too few sacrifices.” Obama has proposed a $1.8 trillion dollar deficit, which nearly doubles the amount of Federal promises versus sacrifice ($3.5 trillion budget vs. $1.7 trillion total in revenues), who is going to make up the difference? How much are you personally willing to sacrifice? Are you willing to give away 50% of your income, 60%, all of it? How much?
With taxes on workers frozen for over a decade now, the American worker has been lulled into a dream world where tax increases are only to be going to the rich. However, when the rich step out of the way of the Obama train is still standing on the tracks? As wealth leaves this nation as they left MD, the only one left to make sacrifices are people like you and me. You are welcome to pay my share.