Democrats are now trying to help the 1%: Varney

By OpinionFOXBusiness

Democrats in high-tax states trying to prevent the exodus of the rich

FBN's Stuart Varney on what Democrats in high-tax states are doing to prevent wealthy residents from moving to states with no income tax.

What's this? Democrats trying to help the 1%. The left, having bashed the rich for years, now turns around and defends them?

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Yes, it’s true. But this requires some explanation.

Democrats in California and New Jersey want to convert state and local taxes into charitable contributions.

There's a switch! Under the  new tax law, local taxes are not fully deductible. So in high-tax states, such as California and New Jersey, the 1% will be paying a lot more. The Democrats take one look at that, and they instantly realize they've got a problem. Because, the rich can move. And take their money with them. It’s happened before in Maryland; the state imposed a millionaires' tax. Many of those millionaires promptly left. Maryland lost money!

It’s not that Democrats suddenly love the 1%. Oh no, it’s their money they want – and need. California gets almost half its income tax revenue from its high-income earners. If even a few of them leave, California takes a huge financial hit.

Where would they go? How about Nevada – no state income tax there. Or for New Jersey and New York residents, how about Florida or Texas – no state income taxes there either.

This is what worries the Democrats who have been running high-tax states for years: the exodus of the rich.

But their answer to the problem surely won't fly. The IRS is highly unlikely to allow a tax to be converted into a charitable gift.

Bottom line: high tax states are stuck. They have only one option: cut their own taxes, and they will not do that!

The exodus of the 1% has already started. Looks like it will become a stampede.

What do you think?

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