One man — ONE! — moves his business from New Jersey to Florida to get away from the state taxes and New Jersey has to re-do the budget. Find out why the rich don’t pay their fair share… they pay a lot more than their fair share.
Liberals just don’t get it. In their rush to confiscate every last penny they can squeeze from the most successful, they are cutting off their nose to spite their face. If you sock it to those of means they are going to go looking for some place else to reside. What is so hard to understand about that? I mean, if you were treated poorly, unjustly wouldn’t you seek out rosier horizons?
Let’s take some millionaires who live in state X. They are already paying a hefty state tax. But state X wants more and more and more from them. So the millionaires leave. Now state X is going to have to increase state taxes for everybody that pays taxes, the heaviest burden being on the Middle Class, in order to make up for the loss of revenue that the millionaires provided, because from these people they are now getting zero.
I don’t think that the Left really gets this. So I am going to have to spell it out for them as if they were in the third grade. Let’s say a millionaire in state X pays an average of $75,000 a year in taxes to the state. And let’s say you increase the tax so that millionaires now pay $100,000 in taxes to the state. And let’s say 1000 millionaires up and leave the state. You tried to collect $1 billion from them. In the process, you lost $75 million in tax revenues that they were already paying.
And that doesn’t count business or corporation taxes that your state has. The same scenario holds true. If you over tax them, they will move out to states with little or no business taxes. And that could mean the loss of billions of dollars. Now to keep tax revenues the same after the successful have fled you are going to have to increase the taxes of those who are left. And then when the middle class feels squeezed and many of them move out you are going to once again have to increase taxes on those who are left.
When you end up with only poor people left you are in deep trouble. Poor people, who have the biggest need for state service, do not make enough money to pay the taxes required to provide the services. You have cut off your nose to spite your face. This is exactly what has happened in Cuba and Venezuela.
Where do these successful people and businesses from state X go? They go to state Y. There are many Xs and Ys. So this scenario is repeated among a number of different locations. The X states are run by Democrats and the Y states are run by Republicans. You might note the President’s recent trip to Indiana to tout how his economic policies have led to economic growth in Indiana. Again, another Presidential lie. Indiana is a Y state and has been receiving mass migration from Illinois an X state. Indiana’s economic boom has been fueled by low taxes, fewer regulations, and less lush services. In other words, Indiana has its house in order and Illinois does not. You can see the same thing happening in California where people and business are flocking to Texas. After being in California for over 50 years, Toyota is moving its entire organization to Texas as have other California companies and just plain taxpayers. In New Jersey and New York, the successful are streaming into Florida for the same reason. Both Florida and Texas have no state income tax whatsoever.
Now do you know what the solution for all this that the Left would like to impose? No, it’s not lowering taxes. Nor is it decreasing regulations. Nor is it policing state services so that only the needy obtain them. It’s not even about doing away with Sanctuary cities. No the Left’s solution is TO PROHIBIT PEOPLE AND BUSINESSES FROM MOVING OUT OF STATES.
Much of this fascination with income inequality and so-called “fairness,” comes from an erroneous economic conclusion by the Left. Obama spouts it all the time. The Left believes that any successful person or business stole what they have from the less fortunate. The poor are poor, this economic theory says, because the rich stole some of their wealth.
That is so totally false as to be ludicrous. When a person like Bill Gates working out of his garage invents new technology or a better way of doing it, he creates NEW WEALTH that is added to the system. He steals nothing from nobody. He creates new wealth. The GDP or total wealth of the nation is not a fixed amount. It can increase or decrease with good or bad economic activity. Economic growth and the GDP of the nation has risen because the successful have added to the wealth of the nation providing more opportunity to everybody. They do this best when they are allowed to reap the rewards of the risk they have taken.
The reason why this nation has not plummeted into a depression is precisely because the successful people and businesses that are being punished in some states can move to where they are not and where they can continue to provide good paying jobs. The reason our economic growth is so low, .5% – one half of one percent in the last quarter – is that Obama and the federal government are imposing the same policies that the X states are doing on a national level.