Skip to comments.Taxpayers Go Where Taxes Are Low
Posted on 01/25/2013 6:16:15 AM PST by SeekAndFind
The only thing more stunning than the kleptomania of tax-hiking politicians is their unswerving faith that taxpayers, especially wealthy ones, simply will smile and surrender even more of their money. This fundamental misunderstanding of human nature is impervious to mounting evidence that taxpayers go where taxes are low.
French President Francois Hollande thought he could impose a 75 percent top tax rate and watch revenues flow into Paris like the Seine. Instead, actor Gérard Depardieu rushed into the loving arms of Vladimir Putin and Russias 13 percent flat tax. Former French president Nicolas Sarkozy, of all people, reportedly may move to London to escape Hollandes thievery. (Potential fraud charges also may fuel Sarkozys wanderlust.)
Last year, a record 1,788 Americans renounced their citizenship, mainly in favor of countries with lower taxes and friendlier political rhetoric.
Golf great Phil Mickelson generated headlines this week when he suggested that high taxes might drive him from California or perhaps America.
There are going to be some drastic changes for me, Mickelson said.
If you add up all the federal [levies], the disability, the unemployment, the Social Security, and the state, my tax rates 62, 63 percent. Imagine keeping just 37 cents of every dollar you earn. Is that a fair share?
Before President Obama, Washington Democrats, and even some invertebrate Republicans boost taxes any higher, they should read How Money Walks. Author Travis Brown demonstrates how Americans between 1995 and 2010 shifted some $2 trillion in wealth by abandoning California, Illinois, New Jersey, and other high-tax states and unpacking in low-tax states such as Florida, Nevada, and Texas.
After spending several years mapping and analyzing these data, one correlation keeps popping up: Income moves to where it is most welcome, tax-wise, Brown writes. Money walks because opportunity talks.
As I observe in an essay for Browns book, this reality is undeniable among the Empire State and its neighbors.
While New York Citys bright lights and endless excitement still lure people, Gotham also has watched many of its denizens decamp. While this states steep living expenses and anti-business tone repel potential residents, painful tax obligations lead too many New Yorkers to cry Uncle! just before they hire moving vans.
I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers, explained Tom Golisano, chairman of Paychex, Inc. To be eligible, you need do only one thing: move out of New York State. As he wrote in Adios, New York, a New York Post op-ed in May 20009, Golisano spent about 90 minutes transferring his voter registration, drivers license, and domicile certificate from New York State to Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually, Golisano calculated. By domiciling in Florida, which has no personal-income tax, I will save $13,800 every day. Thats a pretty strong incentive.
I left New York in 1997 strictly to get away from the onerous taxation, Rush Limbaugh declared on his national radio program, soon after Golisano spoke up. I dont want to talk numbers, but it was humongous. . . . So I used my mobility and I moved. Limbaugh landed in income-tax-free Florida.
Unfortunately for the popular broadcaster, every day that he works in New York State (which he sometimes visits), the authorities tax his income proportionally. They do so despite Limbaughs protests and ongoing legal challenges. My number is $20,000 a day, every day I work in New York, $20,000 a day, Limbaugh noted. Sometimes 18, sometimes 20. My income changes year to year, so I guess it averaged out $18,000 a day.
One-way traffic from the Empire State to the Sunshine State is so steady that Harrington Moving and Storage, Inc., specializes in easing that exodus. Our professionals work hard to ensure that you dont have to during your move from New York to Florida, boasts the Maplewood, N.J.based company on its website. You can rest assured knowing that your New York to Florida move will be smooth, relaxing, and seamless throughout.
Contiguous with the Empire State, Connecticut still is smarting over the relocation of hedge-fund manager Edward Lampert. With an estimated net worth of $3 billion, according to Forbes, Lampert was considered the fifth-wealthiest man in the Nutmeg State. In August 2011, Connecticut increased taxes by $875 million, retroactively to that January. It cut the maximum property-tax credit from $500 to $300 and lifted its top state income-tax rate from 6.5 percent to 6.7 percent. Then, on June 1, 2012, Lampert moved his company, ESL Investments, to Florida. Lampert also took with him the $10.6 billion that ESL reportedly controlled at that time.
We are all aware that the changes to the tax structure in Connecticut last year have given many people pause as to whether this is the best place to do business and reside, Greenwich first selectman Peter Tesei told the Hartford Courant. I am concerned about the departure of Mr. Lampert and his firm, and would ask the state of Connecticut to take another look at its policies.
Supply-side economists Arthur Laffer and Stephen Moore found similar unintended consequences just across the Hudson from New York. In 2004, New Jersey boosted its top tax rate from 6.35 percent to 8.97 percent. As they wrote in the Wall Street Journal, Examining data from a 2008 Princeton study on the New Jersey tax hike on the wealthy, we found that there were 4,000 missing half-millionaires in New Jersey after that tax took effect. State deficits soon erupted like Jersey barriers beside a ditch.
Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place, Laffer and Moore also pointed out. By definition, there is no way to measure, for instance, the positions that a retail chain does not create when it never opens stores in New York State because its owners prefer not to lose their shirts by crossing the George Washington Bridge into Manhattan.
For now, put aside the talent that New York States high taxes repel, the jobs and careers that they strangle in the crib, and the goods and services that New Yorkers cannot enjoy when the entrepreneurs who generate them vanish in disgust or simply stay out. Gothams and the Empire States punitive taxes are most pathetic for their counterproductivity. New Yorks sadistic tax code almost certainly chases away more revenues than government would collect if it lacked Americas gold medal among per capita state-tax burdens.
Referring to local liberal Democrats who hope to succeed him at City Hall and then jack up taxes on wealthy New Yorkers, Mayor Michael Bloomberg said last October that this idea is about as dumb a policy as I can think of. Just before the Columbus Day Parade, Bloomberg elaborated: If you want to drive out the 1 percent of the people who pay roughly 50 percent of the taxes, or the 10 percent of the people who pay 70-odd percent of the taxes, thats as good a strategy as I know. Bloomberg added: Thats exactly the [way] to do it, and then our revenue would go away, and we wouldnt be able to have cops to keep us safe, firefighters to rescue us, or teachers to educate our kids.
From class-warrior-in-chief Barack Obama to sticky-fingered city councilmen, politicians always should remember that taxpayers are not oak trees. Shake them too hard, and they and their money soon will be gone with the wind.
Deroy Murdock is a Fox News contributor, a nationally syndicated columnist with the Scripps Howard News Service, and a media fellow with the Hoover Institution on War, Revolution, and Peace at Stanford University. Neal K. Carter furnished research for this piece.
I may have to get out while the getting is good.
Warmer climes and more people-friendly states beckon ...
Ted Kennedy started the tax brakes for offshore investments and his brother JFK was the first to break into Social security.
Americans want low taxes and they also want the state to take care of them.
We want to keep our money like Americans but we also want to live like Europeans.
I taught managerial accounting at the university for many years. The majority of this course, along with cost accounting is to show that people are motivated to find the optimum maximization of revenue and minimization of costs.
Thus when this country started paying for unwed mothers, they got more unwed mothers. When they started giving benefits to illegal aliens, they got more of them. When they increased unemployment benefits, they got more unemployed. When they paid farmers not to grow crops, they got fewer crops!
When Reagan decreased taxes, he got much more revenue to tax. It really is that simple. It’s a matrix that you work until you either quit or expand the matrix by moving operations from the USA.
The problem with socialism is that they don’t understand motivational behavior as it relates to cost/benefit!
Obama: “Because it’s the right thing to do”.
Communists do what communists do, regardless, because it is their perverted religion.
I am a recent refugee from Los Angeles to Dallas.
Let me tell you motivation behind my quitting the state and city of my birth.
It isn’t the actual cost. I can easily afford the high taxes. It is the ARROGANCE of the politicians who think they are “doing good” by pointing a gun to my temple and taking my money. The constant use of me needing to “pay my fair share” is accompanied by this idea that the harder I work the more I must be PUNISHED.
I had previously been in Texas (total time about 2 years), liked the people, the independent spirit and the “leave me the heck alone” attitude towards Government (I voted for Cruz BTW and felt good about positively contributing).
At least Property Taxes are local and used for local purposes.
I haven’t done the math, but from what I reckon I have netted 10%-15% as a result of my move.
I won’t stay where I am not wanted. California keeps telling the creators “we hate you” and takers “more free stuff!!” and then scratches its head about why it is broker than broke.
People don’t understand that Reagan’s tax philosophy was not just cut taxes to increase taxable profits. It was much, much more.....
Investment Tax Credits for the purchase of new equipment used in business to motivate business expansion
Shortened depreciable life of asset write off , especially buildings to motivate business expansion
Section 179 immediate write off of new equipment expenditures... These were only for small businesses as any business with over $200K in equipment expenditures were not allowed the write off.
These are the tax laws that help stimulate the economy. Remember Reagan took us from double digit inflation and double digit unemployment to a booming economy. O’Bummer can’t even turn this around by giving free money with low interest rates......
Tom golisano: I needed to save my Millions to keep monica seles happy......LOL!
The Eurocrats call this “destructive tax competition”. Which is why global UN taxes rank high on their To Do List.
The Eurocrats call this “destructive tax competition”. Which is why global UN taxes rank high on their To Do List.
I could have written your post !! With the exception of moving from Minnesota to Wyoming.
I agree, the sheer arrogance of the political class of MN was the main reason behind our move. Yes, the taxes were high (and I hear they are going to go higher in MN), but that wasn't all of it. It was that I wasn't paying my fair share !!! This from the state that loves to hand out money left and right to anyone that shows up at their door and says "GIMME GIMME".
They couldn't even get a law passed there that said your welfare bennies would equal the state you just moved from (for a short period of time)!!
No, welcome to MN and we are going to up your bennies just because you came here -- oh and by-the-way, tell all your buds back in your home state that there is more money for them too --- just come on over.
And then to top it all off, they post numerous surveys that say the higher taxes are no factor in anyone moving out of taxing MN. Hello --- I'm waving my hand, but no one will count me.
Wyoming is beautiful and so business friendly. My small business will thrive here and the lack of state income tax is wonderful, but it is not the only thing. This state believes in freedom --- not socialism like MN so wantonly craves.
Tina Turner on her way to Swiss citizenship - Tina Turner - Zimbio
US pop legend Tina Turner, who has been living in Switzerland since 1995, will soon receive Swiss citizenship and will give up her US passport, Swiss media reported
> we also want to live like Europeans.
I don’t want to live like Euro-peons.
I’d rather live free and depend on God.