Next stop...Galt's Gulch

Millionaires Go Missing - an OpEd piece posted on the Wall Street Journal.

I read this headline and almost peed myself in excitement. Could it be that Atlas has begun shrugging?

As the State of Maryland has discovered, raising taxes on the "super-rich" to fund bloated government budgets doesn't necessarily equate into more tax revenue for the state. From the article:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

Sure, the recession and the Bear market has likely taken a toll on the number of millionaire tax returns this year. And while it's not too likely Galt's Gulch has opened for business, it is very likely many of them have simply moved to more tax-friendly states. Raise the tax rates high enough and the "super rich" simply vanish, proving that Trickle Up Poverty really does work.