Our top-heavy economy has come to this: One man can move out of New Jersey and put the entire state budget at risk. Other states are facing similar situations as a greater share of income — and tax revenue — becomes concentrated in the hands of a few.Last month, during a routine review of New Jersey’s finances, one could sense the alarm. The state’s wealthiest resident had reportedly “shifted his personal and business domicile to another state,” Frank W. Haines III, New Jersey’s legislative budget and finance officer, told a State Senate committee. If the news were true, New Jersey would lose so much in tax revenue that “we may be facing an unusual degree of income tax forecast risk,” Mr. Haines said.
It isn't just New Jersey:
In New York, California, Connecticut, Maryland and New Jersey, the top 1 percent pay a third or more of total income taxes. Now a handful of billionaires or even a single individual like Mr. Tepper can have a noticeable impact on state revenues and budgets.California had to account for a “Facebook effect” in 2012 and 2013 after that company’s 2012 initial public offering of stock. The offering generated more than $1 billion in revenue — much of that from the chief executive, Mark Zuckerberg, and a small group of company shareholders. Washington, D.C., had an unexpected $50 million gain in its 2012 fiscal year — which helped create a budget surplus — after the death of a local billionaire increased its estate tax receipts.Some academic research shows that high taxes are chasing the rich to lower-tax states, and anecdotes of tax-fleeing billionaires abound. But other studies say there is little evidence showing that the rich move solely for tax purposes. Millionaires and billionaires who move from the high-tax states in the Northeast to Florida, for instance, may be drawn by the sunshine, lifestyle and retirement culture, in addition to lower taxes.
The NYT is a liberal paper, so you knew "income inequality" had to come up somehow:
“In a time of rising inequality, I’m not sure the right answer is lowering taxes or making them less progressive,” said Kim S. Rueben, senior fellow of the Urban-Brookings Tax Policy Center at the Urban Institute. “It’s more about keeping an eye on people, seeing where they are and enforcing the tax rules.”
Don't let those rich people move! And if they do, tax them to death!
Seems to me that the states listed above can't afford to kill their golden goose. I'd suggest that if their budgets are overly dependent on just a few people, they probably shouldn't chase those people away with confiscatory tax rates.
In California, 5,745 taxpayers earning $5 million or more generated more than $10 billion of income taxes in 2013, or about 19 percent of the state’s total, according to state officials.“Any state that depends on income taxes is going to get sick whenever one of these guys gets a cold,” Mr. Sullivan said.
Liberals decry the rich--even though so many of them are rich themselves!--but can't fund a government without them. Hey libs, you want to be the party of science? Study some economics.