The millionaires disappear
Attempting to close its budget gap without doing what it should have done — cut spending — Oregon raised its “piggy-back” state income tax on the richest 2 percent of its residents last year.
As a result — Nevada legislators, please note — Oregon tax receipts are now … falling.
As The Wall Street Journal editorialized on Dec. 21, “The sun also rose in the east, and the Cubs didn’t win the World Series.”
Receipts from the new tax fell from $180 million to $130 million in one year.
The old Supreme Soviet used to blame the weather. Bad weather, not collectivism, ruined the harvest in the Ukraine — previously the breadbasket of Eastern Europe — pretty much from 1918 to 1990, apparently.
In their turn, the taxmeisters of the Oregon Legislature now blame “the poor economy.”
Yeah.
Where do “the rich” go?
Some literally move out of the jurisdiction. Some merely move their assets out of the jurisdiction. But many also now find it worthwhile to hire astute bankers, accountants, trust and estate managers who sit down and ask, “What does the taxing authority consider ‘taxable income’? What if these assets were owned by a trust, or transferred in some different way … ?”
Etc. etc.
This is merely a replay of America’s “disappearing millionaires” after the first federal income tax went into effect around the time of World War I. The same thing happened again in 2008 when Maryland instituted its own “millionaire tax.” Roughly one-third of that state’s millionaire households vanished from the tax rolls after rates went up.
Raising taxes on the rich is a bit like attempting to build a corral around a herd of cats. The darned things keep drifting off.