States look to hike tax on millionaires

iVillage Member
Registered: 03-18-2000
States look to hike tax on millionaires
9
Tue, 01-17-2012 - 7:52am

Washington won't pass tax increases so I guess states need to raise taxes on the wealthiest to get out of debt.

http://money.cnn.com/2012/01/16/news/economy/states_millionaire_tax/index.htm?iid=HP_River

NEW YORK (CNNMoney) -- As the "tax the rich" debate rages in Washington D.C., some states are turning to their wealthiest residents to bring in much-needed revenue.

The governors of the two largest Democratic states want rich folks to help close budget gaps. And Democratic lawmakers elsewhere are preparing to do battle with Republican leaders to blunt budget cuts by instituting a millionaire tax.

This marks a shift from last year, when state leaders largely shied away from raising taxes in general. Several cash-strapped states, including Maryland, New Jersey and Oregon, let their millionaire taxes lapse.

But spending cuts alone aren't getting the job done.

"As the effects of the recession linger, states are realizing they can't [balance their budgets] by cutting education, transportation and other investments that create jobs," said Jon Shure, director of state fiscal studies for the left-leaning Center on Budget and Policy Priorities.

Election 2012: How rich are these guys?

After refusing to renew New York's millionaire tax, Governor Andrew Cuomo ended up hiking the levy on the rich anyway. The increased revenue will close about half of the state's $3.5 billion budget gap for the coming fiscal year.

The Empire State had instituted a surcharge in 2009 that raised the top rate to 8.97% for earnings above $500,000. It was scheduled to fall to 6.85% this year.

Instead, Cuomo created new tax brackets that lower the tax rates for those earning less than $300,000. But income above $2 million will be taxed at a new top bracket of 8.82%, nearly two percentage points higher than had been expected. It expires at the end of 2014.

"Whether a person made $20,000 or $20 million, they paid the same rate. It was just wrong -- because a flat tax is not a fair tax," said Cuomo in his State of the State speech earlier this month. "Our principle is simple: the more you make, the higher rate you pay. Today, the middle class is paying the lowest rate in 58 years."

On the other side of the nation, California Governor Jerry Brown built his budget assuming that voters approve a $6.9 billion tax package on the November ballot. He's planning to sell his plan to Golden State residents at his State of the State address on Wednesday.

If the ballot measure passes, three new tax brackets would be created. Single taxpayers would fork over an additional 1 percentage point on earnings over $250,000, 1.5 percentage points on income over $300,000 and 2 percentage points on earnings over $500,000. The higher rates would be in effect for the 2013 through 2016 tax years.

In addition, Brown wants to raise the sales tax by half a percentage point. The added revenues would go to fund schools and public safety, which would otherwise face $5.4 billion in cuts, he said.

In New Jersey, voters favor instituting a millionaire tax by a 2 to 1 margin, according to a Quinnipiac University Poll conducted late last year, marking an all-time high.

Democratic lawmakers, who control the state legislature, are hoping to convince Governor Chris Christie, a Republican, to reinstate a surcharge on the wealthiest residents. He had been staunchly opposed to a similar effort last year, instead instituting deep cuts in spending.

"Despite all the talk about shared sacrifice, the wealthiest residents in our state are the ones who are being asked to sacrifice the least," said state Senator Barbara Buono, who until recently served as majority leader.

But conservatives argue that while raising taxes on the wealthy might bring in more money in the short-term, it could hurt any state's economy in the long run.

"We're skeptical of the idea that high rates do anything but scare people out of the state and limit economic growth," said Joe Henchman, vice president for state projects at The Tax Foundation.

 


Photobucket&nbs

iVillage Member
Registered: 02-05-2011
Tue, 01-17-2012 - 10:27am
These guys are so rich, that the top 1% pay 37% of the tax in the U.S. more than the bottom 80%. These rich folks can move to other states, hire tax attorneys to legally avoid unwanted taxation, and when they move jobs and job creation go with them.
iVillage Member
Registered: 03-03-2009
Tue, 01-17-2012 - 2:46pm
Yeah, that's what they keep telling us. Reminds me of spoiled brat behavior--follow their rules or they pick up their toys and go play with someone else. ****shakes head**** Neither moral nor mature.......

We have a governor who wants to roll back just about all environmental and energy efficient standards so that big oil will come play (never mind that they have a nasty reputation for wrecking play grounds); and contractors will be put back to work throwing up MORE energy hogging structures when the state already has a glut of empty business and residential properties. ****sighs****

I would be deeeeelighted to see adults in leadership; ones who are looking to find ways for the nation and the state to grow slowly and steadily (wins the race according to the tortoise) through sustainable decisions. Instead there appear to be many temper tantrum throwing children who want their way right now.

Jabberwocka

iVillage Member
Registered: 03-18-2000
Tue, 01-17-2012 - 3:00pm

Many hire tax attorneys & move their money off shore so they don't have to pay any tax.

Those hard done by wealthy folk my heart bleeds for them.

Mitt Romney to release tax returns, estimates rate at about 15 percent

http://www.washingtonpost.com/blogs/election-2012/post/romney-to-release-tax-returns-estimates-rate-at-about-15-percent/2012/01/17/gIQALiQf5P_blog.html?hpid=z1

My DH generally gets a bonus every year 50% of it goes for taxes.

 


Photobucket&nbs

iVillage Member
Registered: 02-05-2011
Tue, 01-17-2012 - 4:47pm
I don't think it's immoral to want to keep your earned assets. If the cost of living in a state is too high, an earner should consider the pro's and con's of moving.

Regarding environmental standards, the federal EPA under the current administration has no problems preventing most oil exploration and development. I don't think a state can do much but sit back and marvel at the EPA's ability to halt much of anything from happening.

As to sustainable solutions. One day, there will be viable alternatives. Currently hydro works, as does nuclear. Each has positive and negative aspects. Wind, hasn't worked well in most places. Same for solar. Cost per watt is too high.

For now, oil, gas and coal do a magnificent job at providing us the 1st world standard of living so many enjoy.
iVillage Member
Registered: 03-03-2009
Tue, 01-17-2012 - 7:00pm

Keep one's earned assets? Puhleeeease. What these people want is to make sure that their "earnings" or projects ((ever hear of TIFF's?) are taxed at a lower than average rate. People who make much less, pay an even greater proportion of their paltry wages and they can't afford to move or find tax lawyers. Give me a break, that 's just robber baron greed, pure plain and simple. What the RB's want is a third world country/state. It's not admirable or sustainable behavior. I'm one of the 1%, BTW, so class envy guff isn't going to get much traction.

EPA hasn't been the stalwart bastion of greenies which some like to portray. More at http://www.cnn.com/2012/01/17/opinion/granderson-epa-republicans/index.html As the piece so succinctly and black humorously notes: " research shows that poor air and water quality are people killers and without people, jobs are pretty much useless". But hey that does NOT make for good conservative (not to be confused with "conservationist") copy.

Actually, our standard of living seems to be deteriorating. Much of the much-hyped national debt is due to the cost of waging a "pre-emptive" war to gain access to Middle East "cheap" (HAH!) oil. A look at the bigger picture (environment, sustainability, true cost) pretty much makes nonsense of the "magnificent job" characterization.

Jabberwocka

iVillage Member
Registered: 02-05-2011
Wed, 01-18-2012 - 8:30am
I think people look at the benefits they get from government and the cost government imposes on them, and decide what is in their best interest. It's a lot easier to move to another state than another country. When states tax the rich, it's often a lot easier for the rich to migrate than pay a lot more.

If on the other hand, a state is so beautiful, and it's government is so wonderful, that the rich don't mind paying most of their earnings in taxes, then we have a win win.
iVillage Member
Registered: 03-03-2009
Wed, 01-18-2012 - 12:06pm

Big corporations and, perhaps, the very affluent might well "look at the benefits they get from government and the cost that government imposes on them, and decide what is in their best interest". Most of the rest of us go where we perceive market or employment opportunities without crunching numbers as you postulate.

Thank you for making my point--the rich probably DO find it easier to migrate than pay taxes. And many of them choose to use off-shore tax havens and avoid federal taxes as well.

I cannot find it anywhere in my heart or mind to sympathize with or condone people who have no loyalties or values beyond themselves and their money.

As to your last sentence, gimme a break. "Pay most of their earning in taxes"? You mean like Mitt? 15%? Show me, do (I will be waiting anxiously) where the tax rate is 51% (that would be the definition of "most", would it not?) or higher.

Jabberwocka

iVillage Member
Registered: 02-05-2011
Thu, 01-19-2012 - 2:35am
15% is the capital gains tax. Direct your anger to one William Clinton, who liberals called our first black President. You see he lowered the capital gains rate, not Bush. :) If you don't like the tax rate Mitt gets, blame a Democrat. Blame all the other rich Democrats who are in the same bracket and take the same tax rate. Did you notice when Congressman Kennedy got in a car accident, his car was owned by Friends of Patrick Kennedy. Can you say tax shelter? Do you have ire in your heart against all the rich Democrats who use shelters, or are Republicans your only target?
iVillage Member
Registered: 03-03-2009
Thu, 01-19-2012 - 12:04pm
Uhhhh....you do know that while Clinton did indeed drop the capital gains rate from 28%, the subsequent rate was 20%. Bush was the one who dropped the rate to 15%. More at http://www.taxfoundation.org/blog/show/23137.html

Clinton made his move at a time when most sectors of the economy were in pretty good shape so it didn't rouse the ire of the "99%" quite like such an act might do today.

I am a liberal independent, not an ideologue nor hooked to the Democratic Party. The fact that they're the lesser of two evils doesn't make them without flaw or smirch.

Getting back to the original point, depending on source of income, the "pay most of their earning in taxes" statement is open to serious questioning. And I'm still waiting to learn of a state where the tax rate is 51% or higher.

Jabberwocka