Fighting For The Top Spot!

Thanks to excruciatingly weird schedules this week, my radio partner in crime Jazz Shaw and I (watch for Jazz's report from the NY Auto Show over at "The Moderate Voice" on Monday), had a very special Saturday edition of MidStream Radio today. One of the topics we discussed today was the very unreal actions by some state legislators to actually raise (some prohibitively) taxes in their states.

Like the old competition to have the world's tallest building, New York can't resist having the nation's highest taxes. So after California raised its top income tax rate to 10.55% last month, Albany's politicians leapt into action to reclaim high-tax honors. Maybe C-Span can make this tax competition a new reality TV series; Carla Bruni, the first lady of France, could host.
They can invite politicians from the at least 10 other states that are also considering major tax hikes, including Oregon, Illinois, Wisconsin, Washington, Arizona and New Jersey.

I have no doubts that my old home state of Minnesota is on that list. I've seen the proposed bills. After all - they have a reputation to maintain. They are after all the 3rd highest corporate tax rate IN THE WORLD donchaknow. What do we have to do to reach that top spot?

One thing that we mentioned was this....

One explicit argument for the $787 billion "stimulus" bill was to help states avoid these tax increases that even Keynesians understand are contractionary. Instead, the state politicians are pocketing the federal cash to maintain spending, and raising taxes anyway. Just another spend-and-tax bait and switch.

One of the more Orwellian proposals in the NY Legislature is the so-called "Millionaires Tax". However, the definition of "millionaire" in this case is rather - um lax....

In New York, Assembly Speaker (and de facto Governor) Sheldon Silver and other Democrats will impose a two percentage point "millionaire tax" on New Yorkers who earn more than $200,000 a year ($300,000 for couples). This will lift the top state tax rate to 8.97% and the New York City rate to 12.62%. Since capital gains and dividends are taxed as ordinary income, New York will impose the nation's highest taxes on investment income -- at a time when Wall Street is in jeopardy of losing its status as the world's financial capital.

So making $200,000 a year now constitutes being a "millionaire"? Have you ever tried to live in the New York City area on that little????

In addition, New York is talking about a "soda tax".....

The problem with all of this is that it is chasing people out of these states. The same states with the highest tax rates (New York and California) are losing over a million taxpaying citizens a year! Illinois (the 44rd "best" state in the Union on the ALEC report) is losing over 3/4 of a million and New Jersey (46th on the list) is losing almost half a million! It is no coincidence that the states that are losing the most taxpayers every are are also the highest taxed states in the union.

Which brings us to poor Minnesota. Ranked 40th on this years ALEC report, Minnesota is facing huge job losses as the corporate tax rate sends it's biggest employers fleeing the stagnant economy coupled with the ever rising tax burden (more on that later).

What is it going to take for the "progressive" leaders in these "poor states" to realize that the policies that they are enacting are driving taxpayers away? I suppose only time will tell, but for the sake of those who can't leave - I hope it soon.