In Maryland, Welfare Increases and Taxpayers Leave
Two reports one, from the CATO Institute, the other from the Tax Foundation show that in Maryland welfare benefits have increased while taxpayers have fled.
In their study The Work Versus Welfare Tradeoff: 2013, CATO scholars Michael Tanner and Charles Hughes calculated state-level welfare benefits, and found that in Maryland a welfare recipient is eligible to receive benefits totaling $35, 672, an increase of $6,200 since 1995. That ranks Maryland 10th highest in the nation.
Tanner noted, in a Baltimore Sun oped that to make her family better off than that, a mother of two would have to earn more than $18.35 per hour.
Tanner and Hughes conclude that people taking advantage of these welfare benefits are acting rationally to the incentives provided by policy makers, which make welfare more attractive than work.
Taxpayers are rational actors as well and they respond to incentives—and disincentives. The Tax Foundation published a map showing migration of personal income between the states from 2000-2010. Maryland ranked 43rd, losing $5.5 billion in net adjusted gross income. Maryland taxpayers see the low income tax (in some cases no income tax) burden of other states and leave, taking their money with them.
Not coincidently Maryland’s chief source of revenue comes from the state income tax. Another Tax Foundation map shows Maryland ranks second in the nation for income tax as a percentage for all state and local revenue.
The migration numbers suggest that it’s not just the rich leaving for easier tax burdens, but the middle class as well, much like all the ex Californians, these former Free Staters are refugees from Maryland’s war on itself.
The term “One Maryland” is a typical trope in Governor O’Malley’s rhetoric. However, under his policies and that of the state’s one-party Democratic rulers, that are causing the exodus, we are seeing an increasingly bifurcated state–Two Marylands–the very rich and the very poor.