Flight of MD Millionaires Haunts O'Malley Budget Policy by: Mark
http://yrnetwork.com/blogs/2905/view.aspx?article=560
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http://yrnetwork.com/blogs/2905/view.aspx?article=560
The #1 Republican Network of Young Professionals, Students, Entreprenuers, and Young Business Leaders: http://yrnetwork.com/
“Of course millionaires are leaving Maryland,” exclaimed Anirban Basu as he discussed the deteriorating economic conditions facing Maryland’s citizens and businesses.
Basu, an economist and CEO of Sage Policy Group, was the keynote speaker at the Maryland Association of Counties (MACO) summer conference last week. In analyzing the decline of revenues from personal income taxes paid to the state, Basu attributed part of the decline to Governor O’Malley’s initiative last year to raise the tax rate on earners of $1 million or more.
Under the O’Malley proposal enacted into law in the 2008 Session, the top marginal tax rate was increased from 5.5% to 6.25%. When coupled with the local income tax, some Maryland filers are now taxed at a combined 9.45% personal income tax rate – or they can move to a low tax state where there is no personal income tax.
Prior to the O’Malley tax increase, a miniscule 0.3% of Maryland taxpayers (taxpayers with $1 million or more income) contributed 15% of the total revenues for the state's personal income tax receipts.
We can expect the Comptroller’s office to provide final figures on the flight of millionaires from Maryland in October, but the initial analysis was not good. As reported in the Wall Street Journal (click here) in May:
“One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a ‘substantial decline.’ On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year - even at higher rates.”
This ill-fated policy decision represents a $206 million shortfall of the current $800 million hole in the O’Malley deficit. It is likely that state employees will be forced to cough up at least $34 million (if the furlough is comparable to last year's furlough plan) although many analysts expect even deeper cuts into state employee salaries. O'Malley told local officials at the MACO conference that they should expect $250 million in cuts to local aid.
This is just one of a great number of bad policy decisions made by the O’Malley Administration. As state employees, local governments and others face the day of reckoning this week for the announcement of the next round of cuts, they will realize that it’s not just the “Great Recession” but also the misguided O'Malley budget policy that places on them the burden of cleaning up the state’s budget crisis.
- - Maryland Senate Republican Caucus
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20090825 Flight of MD Millionaires Haunts OMalley Budget Policy
Basu, an economist and CEO of Sage Policy Group, was the keynote speaker at the Maryland Association of Counties (MACO) summer conference last week. In analyzing the decline of revenues from personal income taxes paid to the state, Basu attributed part of the decline to Governor O’Malley’s initiative last year to raise the tax rate on earners of $1 million or more.
Under the O’Malley proposal enacted into law in the 2008 Session, the top marginal tax rate was increased from 5.5% to 6.25%. When coupled with the local income tax, some Maryland filers are now taxed at a combined 9.45% personal income tax rate – or they can move to a low tax state where there is no personal income tax.
Prior to the O’Malley tax increase, a miniscule 0.3% of Maryland taxpayers (taxpayers with $1 million or more income) contributed 15% of the total revenues for the state's personal income tax receipts.
We can expect the Comptroller’s office to provide final figures on the flight of millionaires from Maryland in October, but the initial analysis was not good. As reported in the Wall Street Journal (click here) in May:
“One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a ‘substantial decline.’ On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year - even at higher rates.”
This ill-fated policy decision represents a $206 million shortfall of the current $800 million hole in the O’Malley deficit. It is likely that state employees will be forced to cough up at least $34 million (if the furlough is comparable to last year's furlough plan) although many analysts expect even deeper cuts into state employee salaries. O'Malley told local officials at the MACO conference that they should expect $250 million in cuts to local aid.
This is just one of a great number of bad policy decisions made by the O’Malley Administration. As state employees, local governments and others face the day of reckoning this week for the announcement of the next round of cuts, they will realize that it’s not just the “Great Recession” but also the misguided O'Malley budget policy that places on them the burden of cleaning up the state’s budget crisis.
- - Maryland Senate Republican Caucus
_______
Related Recent Entries on http://yrnetwork.com/
Flight of MD Millionaires Haunts O'Malley Budget Policy
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8/18/2009 3:03:05 PM
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Limbaugh's performance on Leno's new show yesterday should be embraced by all Republicans; it was an excellent effort of a Conservative finally stepping out into the mainstream and ...read more
Andrew Cuomo is the only obstacle with the GOP taking back the Statehouse in NY State. http://www.rasmussenreports.com/public_content/politics/elections2/election_2010/electio ...read more
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20090825 Flight of MD Millionaires Haunts OMalley Budget Policy
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