It seems the governor of New York needs those rich people. But, as the old saying has it, money goes where it is treated best.
Hochul: What I want to make sure we are smart about is having a system in place where it’s not just taxing for the sake of taxing. And being conscious of the fact that I need people who are high-net-worth to support the generous social programs that we want to have in our state. Right?
Now, there are some patriotic millionaires who stepped up. Okay, cut me the checks. If you want to be supportive, but maybe the first step should be to go down to Palm Beach and see who we can bring back home because our tax base has been eroded. So I philosophically don’t have a problem, I have to look at the fact that we are in competition with other states who have less of a tax burden on their corporations and their individuals.
Washington state lawmakers have approved a 9.9% tax on personal income above $1 million.
Former Starbucks CEO Howard Schultz has moved from Seattle to Miami, he announced in a LinkedIn post, acknowledging the business legacy he built in Seattle, where the coffee company is based. The billionaire said he and his wife, Sheri, both retired and moved “for our next adventure together.”
Not mentioned in Schultz’s message was the so-called millionaires’ tax, which on Tuesday cleared a key legislative hurdle and now heads to the state Senate for final approval.
I may do an inversion. Pay tax on earnings here in the US, but pay a lower rate in Ireland for earnings elsewhere. Taxes are low in the US, but they will probably go up in three years. Time to get out of Dodge.
Hochul has to face the detail that billionaires often have multiple homes in various states. When taxes rise in NY its easy for them to declare residency somewhere else–without even moving. Raising their taxes works only when they are in a generous mood.
Imagine having so much money that you can’t possibly spend it in your lifetime, nor the lifetimes of generations of your family. Then imagine refusing to pay a higher tax rate that won’t significantly impact your generational wealth. Now imagine hoards of fed-up people raiding your fortified compound because you’re a selfish pr!ck.
While I appreciate the rich moving out to save on tax, but also appreciate the states taxing the rich. When the rich move out, they need to remember, NY City as an ecosystem is still very important for their wealth. They can be selfish, but if everyone wants to be selfish, that ecosystem and the wealth that depends on that ecosystem all will be in trouble.
It is like defense spending. Why US needs to spend Trillion $$$ on defense? Who benefits from that? is your average six-pack Joe? or big corporations and billionaires? Saying we are paying more in tax, also needs to factor that.
Ever since Reagan said “Welfare queen”, the country has decidedly thinks the billionaires are victims of taxation and poor are leeches. Nothing is further from truth. But the dirt poor on one side of the political spectrum continues to fight for the rich. Sad.
It is indeed a system in economic flux always seeking an equilibrium. Some people laugh at the Laffer curve, but we are watching it in action. (Of course we don’t know the shape of the curve, only its endpoints.)
Some people cry at the Laffer curve. Some people turn their head sideways like a confused dog trying to figure out why the Laffer curve is used to justify tax rates well to the left of what they should be to maximize revenue.
What do you mean by “we are watching it in action”?
The Laffer curve relates tax rates with the government revenue generated. It is not linear, such that a X% increase in rates always generates Y% in revenues.
We know the two endpoints of the curve. Tax rates of 0% and 100% both generate zero revenues. The shape of the response curve is what we don’t know.
As for watching it in action, look at the upthread article on Washington state and Howard Schultz. I’m pretty sure the state expected to collect 10% of his income. Instead it will be zero percent. Not a linear response.
We don’t “know” that. The idea that taxing individuals at 100% would lead to nobody paying taxes is a theory, not a forgone conclusion. What we do know - at some point between 0% and 100% there’s an ideal sweet spot that maximizes tax revenue. Just kidding, we don’t know that either.
The last 40 years of tax policy is based on an unproven, untested theory that is Laffable…
The Laffer curve is based on a dubious mathematical manipulation derived from other economic theory, and has little empirical backing. However, it makes for a very attractive argument for low tax ideologues.
In general, the tax rate debate is not very productive. In the end, over time, taxes exactly equals spending. It can’t be any other way, unless a country defaults of course. So it makes little sense looking at taxes and tax rates, it’s much more important to look at spending. Spending has almost monotonically been increasing over the last 100+ years. And the biggest question facing any nation is how much of GDP can be spent on governing a country before it becomes unsustainable.
All of the time! If you spend $100T over 100 years, you will have taxed a total of $100T minus whatever debt versus assets remains at that point. That’s true even over 1000 years if there is no default event. How could you possibly think otherwise?
This is not an example of the Laffer Curve. Washington State was previously collecting zero percent of his income. Florida is now collecting zero percent of his income. Both the amount and percentage have not changed.
This is an example of race to the bottom. Companies like Microsoft, Costco, Amazon, T-Mobile, Zillow, Expedia, Tableau, Redfin, Starbucks, F5, etc. originated in Washington State in part because of robust investment in public infrastructure including education.
Some of the founders made a bunch of money and rationally left town (possibly) due to lower taxes. But the businesses remain.
When Ronald Reagan was a Hollywood Actor making $1 million a year, he was in the 90% tax bracket. He stopped working, understandably grousing that it was unfair to work for ten cents on the dollar.
Without Ronald Reagan, Hollywood was unable to make movies and that ended the motion picture industry in California. j/k Of course, what happened is movies still got made, just without Reagan’s talents. Some other B-list actor paid the taxes instead.
For the record, I happen to agree with Reagan’s pique that a 90% rate (top marginal rate it should be said) seems confiscatory. But the notion the Laffer Curve even exists except at the very extreme ends is laffable.
Sure it is. When lawmakers passed that 10% tax its purpose was to increase state revenues. However, the portion that was to come from Schultz is not going to arrive at Olympia.
