Tuesday, May 26, 2009

Bay-Dog Millionaire

There appears to be a big hullabaloo (that's right, hullabaloo) over whether Maryland millionaires are fleeing the state as a result of the new millionaire bracket of 6.25% state income tax. The Wall Street Journal had a brief commentary editorial today suggesting that Maryland Millionaires as a group are paying $100 million less this year than they did in years past.

The Baltimore Sun took offense to this suggestion after staking out the position that millionaires were not in fact leaving but rather have filed for extensions or have lost millionaire status due to the recession. I love (LOVE) this paragraph in the Sun editorial:
Finally, look at it this way: Someone who makes $2 million a year would pay
about $20,000 more in 2008 Maryland taxes than he or she did a year before
because of the millionaire surcharge and other changes to make the tax code more
progressive. That probably seems like a lot of money to the average Marylander,
but it's important to remember just how much more $2 million is than the $57,000
the Census bureau says the average Marylander makes. Look at it this way:
$20,000 is to a $2 million earner the equivalent of about $570 for someone
making $57,000 a year. That's like taxing Joe Blow Marylander an extra $11 a
week. Not great, but not exactly worth moving to West Virginia, either.

Even for someone that makes double the $57,000 average, $570 is a lot of money. Not to mention the fact that millionaires we are talking about are not using $100 bills to light their cigars. These are people with kids in college, parents in nursing homes, and regular bills to pay. $20,000 is a lot of money.

At the end of the day, the Maryland Comptroller Peter Franchot was the one that first said millionaires are leaving. He's the guy that collects our money. I'll take his word over a failing newspaper any day of the week.

2 comments:

  1. I can't feel sorry for millionaires any more than I can feel for those who want affordable housing.

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  2. I don't think we should feel sorry for them and in a perfect world policy wouldn't be based on "feeling sorry" for anyone. I just think this new tax bracket is bad policy when you end up losing revenue. And I also think the Baltimore Sun looks ridiculous here...which can be tiring to point out.

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