Montgomery County Facing Billion Dollar Deficit
The County Executive and County Council blame the millionaire's tax. The subheadline on the story notes that millionaires fleeing the state millionaire's tax caused county revenues to drop 82 percent.
Montgomery lost $4.6 billion in taxable income from tax years 2007 to 2008. More than 82 percent of that drop comes from taxpayers with incomes of $1 million or more, county records show.Now let's do a little math, 82 percent of $4.6 billion in lost revenue is $3.772 billion which when divided by 216 millionaires comes to $17.4 million lost per millionaire. That is from a tax increase of 1.25 percent. Of course, not all the money lost is attributable just to the millionaires themselves, but also factors in things like the services they provided and bought, the capital gains that they earned, business taxes they may have generated etc. But that is a massive revenue hit.
County data show that 216 millionaires who filed taxes for 2007 did not file with the state for 2008, compared with an average of 119 in previous years. While some of those not filing may have died or decided not to file a tax return, county officials said there is plenty of anecdotal evidence that Maryland's millionaires moved to more tax-friendly states.
"It's pretty clear that people did take their income someplace else," said Tim Firestine, chief administrative officer, noting that the loss of just a handful of millionaires has a disproportionate effect on the county's revenues.
Keep in mind that if you tax millionaires more than they already pay, they have the means and motivation to:
1. Find ways to avoid taxes--tax avoidance is legal, tax evasion is not--by sending the money off shore or putting into to tax sheltered programs; or
2. Simply up and move to a tax friendly state; or
3. Simply not make as much money--they have the funds to wait the government out.
I am sure all of these things happened.
So Mr. President--are you looking at what has happened in your own back yard when you tax the wealthy more to subsidize your income redistributionist policies--you get way less revenue.
Read more at the Washington Examiner: http://www.washingtonexaminer.com/local/Montgomery_s-budget-gap-grows-to-nearly-_1-billion-90787299.html#ixzz0l6WXpl6l
4 comments:
Daniel "The Wig Man" Vovak,a a Republican, will run for Montgomery County Executive again Ike Leggett.
One technical point. While "avoidance is legal while evasion is not", the IRS has cast a shadow on the term "avoidance" in favor of "reduction" or "minimization." The issue comes from the impression that it's avoidance of compliance with the duty to pay, rather than avoidance of the **creation** of the duty to pay.
One has a constitutional right to attempt to minimize taxes under a Depression-era case Gregory v. Helvering, a 2nd Circuit federa; case that every critic of high taxes should know, and that has never been overturned.
The math is way off. 4.6 billion taxable, not 4.6 billion in taxes. Furthermore, it is a 82% of taxable income drop, not that revenues dropped that much. Furthermore, 2007 had 95 more millionaires than the previous years averaged. We do not have the data of the previous years to really tell what the trend was.
There is no way to make the claim that there was "$17.4 million lost per millionaire", only that there was a salary 17.4 million per millionaire which could have resulted in taxes. We do not know the tax rate, if there even is an income tax for the county alone (separate from the state), and if there was it would be below 25%. That reduces the figure by a large amount.
Please do not use horrible math in the future. The only real loss that came to the county was loss in property tax from people abandoning their homes to move, which caused them to significantly cut what their property was valued at.
I'm a 42 yr resident of Montgomery County,my parents settled here when I was 15yrs old, I've been here ever since, and paid taxes here!I own 2 properties, one was my dad's in leisure world, (renting it out) the other, my own, in Olney. So I think I have a little knowledge, besides the fact that I've been working for HHS for over 10 years!LOL! All I can say is this: there is a Heck of a lot of wasteful spending going on inside the government, that would curl your hair!You would not believe the stuff that goes on!The incompetence that gets protected and paid for, for YEARS is incredible! So MUCH of this goes on, that the taxes Mr Firestine is trying to distract everyone with, is nothing but a drop in the bucket compared with what could be uncovered by a thorough investgation by some outside business auditors!The Middle and upper middle management, some of which are so heavily vested in the system have no business remaining there, many are just takign up space, some are simply dysfunctional folks that are hidden in offices where they can't do any further harm!And they are being paid tremendous salaries with your tax dollars!THIS is what your county council is so clueless about! The Union, on top of everything else, is driving around in company cars, living in style, has just purchased a condo building with employee's dues! It's totally insane!You have to check this all out..
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