In my weekend special, The Battle for the Future -- it airs Saturday at 9pm and Sunday at 8 PM and 11 PM ET -- I talk with progressives who say that the solution to deficits is taxes on the rich.
But there’s plenty of evidence that won’t work. Maryland’s millionaire tax was supposed to bring in $106 million. Instead revenue went down by $257 million. Many millionaires just left the state. (On O’Reilly last night, I mis-spoke and said this tax was passed ten years ago. It was actually passed in 2008 by Maryland’s current governor.)
Even New York Governor David Patterson may have learned that taxes on the rich don’t work. This year, he said: “We increased the income tax for millionaires last year. We projected that we would get $4 billion and we actually got well short of it.”
That happened because the most productive New Yorkers left the state after the tax increase. One of them is billionaire Tom Golisano, who founded Paychex, a company that processes pay checks for small businesses. He created jobs for 13,000 people. Why would they stay in NY State?
In my special, Golisano says that NY’s tax increase on millionaires was:
the straw that broke the camel's back. Not that it like to throw the number around… But my personal income tax last year if I had stayed here the entire year would've been $13,800 a day. $13,800 a day.
And moving to Florida -- zero. Zero personal income tax.
So he became a Florida resident, where he now spends more than half the year. He notes that the income tax difference wasn’t the only difference:
The second and third issues were the real estate taxes and the sales tax. And I haven't even mentioned the estate tax.
It’s not just states that should be careful. Federal taxes can drive companies to leave America. Some that recently did include Cooper Industries Inc, Seagate Technology, Nabors Industries , Noble Corp, Transocean, and Foster Wheeler.