Montgomery County Facing Billion Dollar Deficit
The County Executive and County Council blame the millionaire’s tax. The subheadline on the story notes that millionaires fleeing the state millionaire’s tax caused county revenues to drop 82 percent.
Montgomery lost $4.6 billion in taxable income from tax years 2007 to 2008. More than 82 percent of that drop comes from taxpayers with incomes of $1 million or more, county records show.
County data show that 216 millionaires who filed taxes for 2007 did not file with the state for 2008, compared with an average of 119 in previous years. While some of those not filing may have died or decided not to file a tax return, county officials said there is plenty of anecdotal evidence that Maryland’s millionaires moved to more tax-friendly states.
“It’s pretty clear that people did take their income someplace else,” said Tim Firestine, chief administrative officer, noting that the loss of just a handful of millionaires has a disproportionate effect on the county’s revenues.
Now let’s do a little math, 82 percent of $4.6 billion in lost revenue is $3.772 billion which when divided by 216 millionaires comes to $17.4 million lost per millionaire. That is from a tax increase of 1.25 percent. Of course, not all the money lost is attributable just to the millionaires themselves, but also factors in things like the services they provided and bought, the capital gains that they earned, business taxes they may have generated etc. But that is a massive revenue hit.
Keep in mind that if you tax millionaires more than they already pay, they have the means and motivation to:
1. Find ways to avoid taxes–tax avoidance is legal, tax evasion is not–by sending the money off shore or putting into to tax sheltered programs; or
2. Simply up and move to a tax friendly state; or
3. Simply not make as much money–they have the funds to wait the government out.
I am sure all of these things happened.
So Mr. President–are you looking at what has happened in your own back yard when you tax the wealthy more to subsidize your income redistributionist policies–you get way less revenue.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/local/Montgomery_s-budget-gap-grows-to-nearly-_1-billion-90787299.html#ixzz0l6WXpl6l