Revenge of the Laffer Curve
by Dan MitchellIt seems New York politicians are running into a slight problem with the Laffer Curve. According to an AP report, the state’s 100 richest taxpayers have paid $1 billion less than expected following a big tax hike. The story notes that several rich people have left the state, and all three examples are about people who have redomiciled in Florida, which has no state income tax. Other rich people, of course, stay in New York but choose to earn less taxable income. With Obama planning big tax rate increases, we may see the same thing happening for the entire country. For more background information on why higher taxes on the rich do not necessarily raise revenue, see this three-part Laffer Curve video series (here, here, and here):
Early data from New York show the higher tax rates for the wealthy have yielded lower-than-expected state wealth. …Paterson said last week that revenues from the income tax increases and other taxes enacted in April are running about 20 percent less than anticipated. The concern about millionaire flight has prompted some states, including New York, New Jersey and California, to increase the highest tax rates only temporarily. …”People aren’t wedded to a geographic place as they once were. It’s a different world,” said New York Lt. Gov. Richard Ravitch. He said last year’s surcharge on income taxes, set to last three years, won’t likely meet expectations. 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 ownerTom 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. …And it’s not just the well-known leaving. Nancy Bell is moving her Science First manufacturer of scientific products from the Buffalo site her father founded in 1960 to Florida… “It was the higher tax brackets, the so-called millionaire’s tax” that forced the move, she said. “We feel we have to look to the future … I’m leaving wonderful, wonderful friends. It’s not our first choice. It’s our 100th.” Maryland enacted higher tax rates for wealthier residents in 2008 to boost revenues but income from those taxes is down 6.7 percent so far this year.
Email this to a friend | Print |
Share on Facebook
| Tweet this
| 
Follow Us on Twitter
Subscribe via RSS
Got a Tip?
51 Comments
[...] This post was mentioned on Twitter by DRIP USA and AZ grassroots. AZ grassroots said: Revenge of the Laffer Curve http://bit.ly/Qrd1t #dripusa #ocra #tcot [...]
Obama's team has problems reporting taxable income.
Geithner and rangel are poster children for the new left. Leona Helmsley said, only little people pay taxes.
Profound paragraph:
"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. YOU CANNOT MULTIPLY WEALTH BY DIVIDING IT."
Dr. Adrian Rogers, 1931
This makes so much senses, almost common sense.
Why would 1% of the highest earning taxpayers stay in the USA? Many have homes abroad, and can easily relocate to Monte Carlo, Costa Rica, Honduras, Brazil, China or even Portugal……..just to protect their hard earned wealth…..then visit their family in US a few days a year…..and then where will Obama go for this lost 45% of his tax revenue to pay for entitlements to those 50% that don't pay any income tax???
We only need several thousand people to relocate to cause tax deficits to skyrocket. States like New York, New Jersey, Michigan, Ohio, Illinois, California, Washington, Oregon and Pennsylvania need to seriously look at cutting state tax rates immediately, if they want to survive the exodus of high achievers that pay thier rediculous bills……hmmmmmmmm….anyone n????
There was a thread here last night "L.A. Times: ACORN Criminal Activity"
http://biggovernment.com/2009/10/04/acorn-campaig...
The hot topic on the Business wires this morning is that Bank of America is looking for an emergency CEO for BofA to replace Ken Lewis who is leaving, immediately. Watch this story unfold. Bank of America will go down.
The roots of ACORN run deep.
The CRA (Community Reinvestment Act) dictated that banks fund loans to people ill qualified to handle them. These toxic assets were bundled and sold overseas to foreign investors, who now hold worthless paper. Is it any wonder why the world isn't happy with US?
I wonder, will Barney Frank or Chris Dodd be available for comment?
Isn't it Paterson said to Rush Limbaugh don't let the door hits you? Well, who is laughing now?
"YOU CANNOT MULTIPLY WEALTH BY DIVIDING IT."
I am shocked!
Does that mean that one cannot borrow money to get out of debt? Uh-oh, somebody is in big trouble……………..
Look for more people to take the Atlas Shrugged option.
I'm sure that Ken Lewis will wind up with a czar position in the Obama Abomination. As to Frank or Dodd making a comment: "George Bush did it!"
I hear they are going to change the name of the BofA to Bank of Armenia.
It is liberating……….
Talk about the free market working!
What the leftist radicals currently running the Democratic party don't understand, because most of them have never been involved in the business world, is that the very "rich" can change the kind of income they receive so that income taxes don't apply to it. No one in their right mind making over $200,000 a year would want that income as wages. There are many LEGAL ways to shield income from being taxed as wages. The income of the very rich is held in the form of unrealized capital gains, unrealized capital gains are never taxed.
What "rich" people do is shift their income into the category that has the least tax consequence. People of more modest means cannot do this or if they can do it the costs of doing so outweigh the benefits.
The founders of the country were right to put a clause in the constitution outlawing a direct income tax by the federal government. The 16th amendment needs to be repealed.
The truly sad thing is that the federal government could have an income stream without taxing its citizens. The federal government owns a massive amount of assets which total in the trillions of dollars. If these assets were managed properly the federal government would need no tax revenue.
I can't understand why some Congress members have not realized that if they insisted that the federal government manage its assets properly making it possible to repeal the 16th amendment and abolish the federal income and capital gains taxes that they would go down in history as the most beloved heroes of the United States.
But I guess that makes too much sense.
The problem, however, is that US citizens cannot vote with their feet. The IRS's authority goes far and wide. You would have to renounce your citizenship and live outside of the U.S. for 10 years before you stopped being subject to US taxation, and before then, the US would claim a right to tax you on your wages in your new home country.
You can fantasize about moving out of the U.S. to avoid the coming tax hike, but the reality is, if you do, you'll just be paying U.S. taxes in a foreign country.
Ronald Reagan was right. When you raise the taxes, people vote by leaving. Progressive liberals always have these lofty notions which totally ignore people's natural responses. They say that it is patriotic to pay taxes, but we keep hearing about how all of these high level officials aren't paying their taxes. Do they think that they are the only ones smart enough to decide they don't like paying taxes? Or, do they think that everyone else buys the lie that it is patriotic to pay their taxes? It's time for a flat tax where we're taxed on what we spend instead of earn, and then everyone pays taxes not just the middle class. Accountability in 2010 and in 2012.
It is one thing for rich people to leave New York, to avoid paying taxes. Moving to a state with no or less taxes is purely an economic and business descision. It is quite different to stay in New York and refuse to pay taxes, or cheat on ones taxes, especially if it is a syctematic pattern going on over forty years.
<a href="http://www.nypost.com/p/news/opinion/opedcolumnis…” target=”_blank”>http://www.nypost.com/p/news/opinion/opedcolumnis…
"The story notes that several rich people have left the state, and all three examples are about people who have redomiciled in Florida, which has no state income tax. Other rich people, of course, stay in New York but choose to earn less taxable income. "
This is Exhibit A on why the Democrats hate the Tenth Amendment almost as much as they hate the Second Amendment. The Tenth Amendment is of course the one reserving for the states all powers not expressly delegated to the federal government.
Expand the power of the federal government enough, especially its rate of taxation, and soon there will be nowhere to hide from the "progressive" agenda in all its forms.
Kind of fun to read this in conjunction with the next article on ACORN and the WFP in New York (The Roger Stone piece.). Paterson got brow-beaten into this tax increase by the ultra left. His prediction is being fulfilled. Things might get interesting in the Empire State. He's already been thrown under the bus by Obama. This means his WFP and ACORN support must be gone too. If he truly plans on staying in the race, where will he turn to re-establish a base? Turn on them? Become the anti-ACORN/WFP candidate? Bet he has a lot of info, and does he have anything else to lose?
The US taxpayers had better hope that there isn't an outbreak of the swine flu at the next Rich People's Convention. That is the convention where they conspire together to take advantage of the poor and down-trodden according to the left.
Warning – Class envy can be very detrimental to your fiscal health.
This piece ties in perfectly to the "party of no ideas" article. The current administration and democratically controlled congress' idea is to "spread the wealth around" to quote the Prez to Joe the Plumber, and then shove that agenda down people's throat with universal health care, cap and tax, etc. Got to hand it to them — from FDR to LBJ to BHO, they are consistent in their efforts to play Robin Hood, and steal from the rich to give to the poor. Unfortunately, they haven't studied Ronaldus Magmus enough to understand that the rich just stop strolling through Sherwood Forest to avoid being "pinched".
Lawmakers Lash Out at McChrystal for Stepping Outside 'Chain of Command'
The 55-year-old top commander of U.S. forces in Afghanistan made an open appeal in London last week for increased military presence in Afghanistan and took aim at an alternative plan proposed by Vice President Biden — one that called for troop withdrawal and airstrikes against Al Qaeda targets.
FOXNews.com
Tuesday, October 06, 2009
0 22 Comments | Add Comment
ShareThis
PHOTOS
Oct. 1: General Stanley McChrystal, Commander of U.S. Forces in Afghanistan, delivers a speech in London (AP).
PEOPLE WHO READ THIS ALSO READ
EXCLUSIVE: Mickey Rourke Opens Up About Abusive Father & the Priest Who Stopped Him From 'Blowing His Brains Out'
Clean Water Activist Killed While Serving in Afghanistan
Ohio Teen Sentenced 2 Years for Baby's Rat Bites, Loss of Toes
N.Y. School District Agrees to Pay Student $1 for Refusing to Allow Bible Club
1,800 Patients May Have Been Exposed to HIV, Hepatitis at Florida Hospital
Administration officials and top Democrats on Capitol Hill are suggesting that President Obama's top commander in Afghanistan stepped "outside the chain of command" when he made a public plea last week for more troops.
Gen. Stanley McChrystal made an open appeal in London last week for increased military presence in Afghanistan and took aim at an alternative plan proposed by Vice President Biden — one that called for troop withdrawal and airstrikes against Al Qaeda targets.
"The short answer is no," McChrystal said last week in London when asked if Biden's approach was feasible. "A strategy that does not leave Afghanistan in a stable position is probably a short-sighted strategy."
"I think any decision to go forward will not just be based on resources. It will be based on what are our goals. And I know people are re-looking at what our goals and objectives are, and redefining and clarifying those," said McChrystal.
In a subsequent 66-page confidential report leaked to the Washington Post, McChrystal wrote that tens of thousands more troops are needed in Afghanistan to address a "deteriorating" security situation and maintain stability in the region. Military experts have placed that number at 40,000.
As Obama prepared to meet Tuesday with 31 members of Congress to discuss war strategy in Afghanistan, several Democratic lawmakers had lashed out at the president's hand-picked commander for voicing his appeal so publicly.
In an interview Monday with PBS, House Speaker Nancy Pelosi said McChrystal's "recommendations to the president should go up the line of command. They shouldn't be in press conferences."
On Sunday, alluding to McChrystal's remarks, National Security Adviser Gen. James Jones said "it's better for military advice to come up through the chain of command." Jones said McChrystal's assessment was his "opinion," and he said the president should be presented with options, "not just one fait accompli."
On Monday, Defense Secretary Robert Gates said "it is imperative that all of us taking part in these deliberations — civilian and military alike — provide our best advice to the president candidly but privately." He did not mention McChrystal's name.
Pentagon spokesman Bryan Whitman told FOX News on Tuesday that he's "disappointed" at the overall lack of confidentiality within the Pentagon over the Afghanistan war strategy.
"It was always the secretary's intent to try to have these discussions to review the assessment within the chain of command and that was the design of it," Whitman said. "That's not how it unfolded, so I would be disingenuous if I didn't say that it is disappointing at times as an institution that prides itself on discipline when there are individuals that violate that trust that's placed on them."
After his speech in London, McChrystal met privately with Obama on Friday during the president's quick trip to Copenhagen — a meeting that White House press secretary Robert Gibbs described as constructive. Obama, who has called conflict in Afghanistan a "war of necessity," has not committed to a troop surge.
But some leading Republicans, like Rep. Buck McKeon of California, ranking member of the Armed Services Committee, have said McChrystal is simply following the objectives and strategy put into place by Obama in March.
"McChrystal was hand-selected to implement that strategy," McKeon told FOX News. And speaking of the president, he added: "I hope he'll listen to his military commanders that he personally put in place."
FOX News' Justin Fishel contributed to this report.
[...] One Does Wonder… October 10, 2009 Posted by taoist in Politics. Tags: Democrats, New Jersey, New York trackback How bad must a blue state’s economic situation get before they decide to vote not blue? Or at least pay attention to the economic theories that are successfully predicting their demise? [...]
You should check this out……
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]………
Visitor recommendations…
[...]one of our visitors recently recommended the following website[...]……
Our Trackback……
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]………
Websites worth visiting……
[...]here are some links to sites that we link to because we think they are worth visiting[...]………
Check this out……
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]………
Awesome website……
[...]the time to read or visit the content or sites we have linked to below the[...]………
Online Article……
[...]The info mentioned in the article is some of the best available [...]………
Our Trackback……
[...]very few websites that happen to be detailed below, from our point of view are undoubtedly well worth checking out[...]………
You should check this out……
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]………
Check this out……
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]………
Awesome website……
[...]the time to read or visit the content or sites we have linked to below the[...]………
Visitor recommendations trackback……
[...]one of our visitors recently recommended the following website[...]………
Awesome website……
[...]the time to read or visit the content or sites we have linked to below the[...]………
Best Links 2011…
I just couldn’t depart your web site prior to suggesting that I actually enjoyed the standard information a person provide for your visitors? Is going to be back often to check up on new posts…
Check this out……
[...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]………
Websites worth visiting……
[...]here are some links to sites that we link to because we think they are worth visiting[...]………
Cool sites……
[...]we came across a cool site that you might enjoy. Take a look if you want[...]………
Best Links 2011…
As I site possessor I believe the content matter here is rattling great , appreciate it for your hard work. You should keep it up forever! Best of luck….
Best Links 2011…
I have been exploring for a little bit for any high quality articles or blog posts on this sort of area . Exploring in Yahoo I at last stumbled upon this site. Reading this information So i’m happy to convey that I have an incredibly good uncanny feeli…
WOW! check this out!……
Amazing Post, worth a read……
Great website…
[...]we like to honor many other internet sites on the web, even if they aren’t linked to us, by linking to them. Under are some webpages worth checking out[...]………
You should check this out……
[...] Wonderful story, reckoned we could combine a few unrelated data, nevertheless really worth taking a look, whoa did one learn about Mid East has got more problerms as well [...]………
Best Links 2011…
Great line up. We will be linking to this great article on our site. Keep up the good writing….
Online Article……
[...]The information mentioned in the article are some of the best available [...]……
Best Links 2011…
hello!,I like your writing so much! share we communicate more about your article on AOL? I require a specialist on this area to solve my problem. Maybe that’s you! Looking forward to see you….
Best Links 2011…
Hello There. I found your blog using msn. This is an extremely well written article. I will make sure to bookmark it and return to read more of your useful information. Thanks for the post. I will certainly return….
herbal remedies Attractive section of content. I just stumbled upon your weblog and in accession capital to assert that I acquire in fact enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement you access…
Attractive section of content. I just stumbled upon your weblog and in accession capital to assert that I acquire in fact enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement you access consistently fast…
reverse phone call lookup Nice post. I was checking continuously this blog and I’m impressed! Extremely helpful info specially the last part
I care for such info much. I was seeking this particular information for a long time. Thank you and best …
Nice post. I was checking continuously this blog and I’m impressed! Extremely helpful info specially the last part
I care for such info much. I was seeking this particular information for a long time. Thank you and best of luck….
invest liberty reserve I think this is one of the most significant info for me. And i am glad reading your article. But want to remark on some general things, The web site style is ideal, the articles is really nice : D. Good job, cheers…
I think this is one of the most significant info for me. And i am glad reading your article. But want to remark on some general things, The web site style is ideal, the articles is really nice : D. Good job, cheers…
liberty reserve I think this is among the most significant info for me. And i am glad reading your article. But wanna remark on few general things, The website style is great, the articles is really great : D. Good job, cheers…
I think this is among the most significant info for me. And i am glad reading your article. But wanna remark on few general things, The website style is great, the articles is really great : D. Good job, cheers…
You must be logged in to post a comment.