A recent report by the conservative tax group Change Maryland shows that wealthy people in the state are following their money and moving out of the state due to high taxes.
The group’s research shows that Maryland experienced the largest mass exodus of Marylanders between the years 2007 and 2010, with over 31,000 residence leaving the state.
“Virginia is now home to 11,455 former Marylanders, taking $390 million from the tax rolls during this three-year period,” the group said in a statement.
The Old Line State raised taxes and fees 24 times since 2007, taking $2.4 billion out of the economy, according to Change Maryland. One seminal tax was the “millionaires tax,” which imposed an added 6.5 percent tax on individuals making more than $1 million.
“Maryland has reached the point of diminishing returns,” Change Maryland Chairman Larry Hogan told CNBC. “We’re taxing people too much and people are voting with their feet,”
“Until we change our focus from tax increases to increasing the tax base, more people are simply going to leave,” Hogan continued, “leading to a downward spiral of raising revenues on fewer citizens.”
The Maryland example of a millionaires tax reignites the debate over who should pay how much in taxes. New Jersey Gov. Chris Christie recently vetoed a millionaires tax in his state, while states like California are looking to their top earners to potentially pay more to fill the budget gaps.
On Monday, President Barack Obama urged Congress to extend the Bush tax cuts for individuals who earn $250,000 or less, and joint filers who earn $250,000 or less. In the same speech, he added that the Bush tax cuts should expire for the top 2 percent earners, and their tax rate return to the level of the Clinton era.
“Many contend that higher taxes drive out the highly mobile rich, who can simply move to a lower-tax state or even lower-tax country,” CNBC reports. “Recent data shows that a record 1,800 Americans renounces their citizenship last year.”
Maryland Budget and Tax Policy Institute Director Neil Bergsman, however, contends that the net loss of people between 2007 and 2010 is “very small.”
“There is no evidence that tax structures are a significant determinant in their location choices,” Bergsman told CNBC, adding that Maryland still has one of the highest concentrations of millionaires in the country.
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