Ten highest tax rates have much in common

By Kevin J.Price

The states with the highest income taxes have a few things in common. They all voted for Barack Obama in the last presidential election, they are all having fiscal crisis and revenue shortfalls, and they have chronic economic and unemployment problems.
Ashlea Ebeling of Forbes Magazine has listed the top ten highest state income taxes.

A dubious distinction indeed:

1.Hawaii: 11% (income over $400,000 (couple), $200,000 (single))
2.Oregon: 11% (income over $500,000 (couple), $250,000 (single))
3.California: 10.55% (income over $1 million)
4.Rhode Island: 9.9% (income over $373,650)
5.Iowa: 8.98% (income over $64,261)
6.New Jersey 8.97% (income over $500,000)
7.New York: 8.97% (income over $500,000)
8.Vermont: 8.95% (income over $373,650)
9.Maine: 8.5% (income over $39,549 (couple), $19,749 (single))
10.Washington, D.C.: 8.5% (income over $40,000)

There is much to learn from these states:

· California has been in a fiscal crisis for decades and its governor has tried to lower every employees wage to minimum wage.

· Some states, like New Jersey, have seem to have had enough and recently elected a tax cutting, anti-spending governor. Chris Christie is turning heads as he privatizes major programs and restores financial order.

· New York has committed economic genocide with its tax policies and it has forced some of the state's richest people to move. One of the most notable being radio talk show host Rush Limbaugh (now living in Florida).

· All of these states are learning that you cannot love jobs and hate job creators. In addition to New York, Maryland (which I expect to hit the list next year) has seen the flight of capital and the ones who own such. The Wall Street Journal reported "in May that after passing a millionaire surtax nearly one-third of Maryland's millionaires had gone missing, thus contributing to a decline in state revenues. The politicians in Annapolis had said they'd collect $106 million by raising its income tax rate on millionaire households to 6.25% from 4.75%. In cities like Baltimore and Bethesda, which apply add-on income taxes, the top tax rate with the surcharge now reaches as high as 9.3%-fifth highest in the nation."

There is an old adage that seems to remain true..."the more you tax something, the less you get of it." Each of these high tax states are getting less revenue because those who create such are leaving. It should not be any surprise because they have the resources to be extremely mobile and their wealth is far more important to them than the convenience of staying subject to such financial abuse. There has never been a time in history where it is easier for money (and those who have it) to migrate.

The only hope for these states is to take the tough tactics currently being deployed by Chris Christie of New Jersey. That governor is cutting millions and moving many functions under government control to the private sector, where competition and real world salaries will help facilitate fiscal responsibility.

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Kevin Price
Host, Price of Business, M-F at 11 am on CBS Radio News
Frequently found on Strategy Room at FoxNews.com
Syndicated columnist whose articles appear on a variety of media outlets.
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