$500 Million of Missing Tax Revenue from The Rich; ECON 101: If You Tax Something You Get Less of It
ASSOCIATED PRESS -- Early data from New York show the higher tax rates for the wealthy have yielded lower-than-expected state wealth. Gov. David Paterson, who had always warned targeting the rich could backfire, fears that's just what happened.
Paterson said last week that revenues from the income tax increases and other taxes enacted in April are running about 20% less than anticipated. So far this year, half of about $1 billion in expected revenue from New York's 100 richest taxpayers is missing. State officials say they don't know how much of the missing revenue is because any wealthy New Yorkers simply left.
But at least two high-profile defectors have sounded off on the tax changes: Buffalo Sabres owner Tom Golisano, the billionaire who ran for governor three times and who was paying $13,000 a day in New York income taxes, and radio talk-show host Rush Limbaugh. Golisano changed his official address to Florida, and Limbaugh, who also has a Florida home, announced earlier this year that he was relinquishing his home in Manhattan.
Donald Trump told Fox News earlier this year that several of his millionaire friends were talking about leaving the state over the latest taxes.
Thanks to Jeff Perry.
7 Comments:
Of course this does not apply to individuals at the Federal level since the only way to avoid income tax is to expatriate oneself (or give up your green card) and pay capital gains as if you sold everything on the day you do so.
And obviously one needs to find a place to live, since the US is no longer open to you. (I don't know but think tax expatriation should result a permanent entry bar as well) Then you have to decide if your new home will send you back to the US on request if you don't pay up, and likely have any us assets confiscated.
It does work in countries with residence based tax systems, but not in citizenship based systems.
So in one sense the US when it first did income tax was smarter than it seemed at the time.
Taxes in the liberal states of New York and New Jersey are out of control, which is why I will change my permanent address to Pennsylvania, which, so far, hasn't been trying to engage in tax thuggery.
And besides, being only an hour or so from NYC, the feds can't prove that I spend most of my time in Manhattan....
if you tax something you get less of it
makes sense
we could tax homelessness and illness and crime and ignorance
then we would have less of them?
Maybe we could tax the posts of 'bix1951'...
jk ;-)
What happens is that the wealthy buy larger homes and assume greater tax deductions for interest payments. Rates did not change during this period. Deductions did.
Bill
"we could tax homelessness and illness and crime and ignorance"...
Well if that sort of taxation could happen then Charlie Rangel will think you're picking on him unfairly...
It does work on the federal level, just not quite to the same extent. Corporations in particular, but even individuals move to other countries, or make investments in other countries. They also aim their investment more and more at avoiding tax exposure, rather than at the best investment before considering taxes, which distorts investment. And some investment simply isn't made because the expected after tax return is reduced by the higher taxes.
A more general comment on citizenship based taxes. I'm against the idea. Most things that happen outside the country should be none of our government's business. That doesn't mean I'm an isolationist, certainly not on trade, and also there are security issues to consider, but recognizing income outside the country isn't a security issue.
- Tim
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