American Elephants

Experience is a Great Teacher, But We Have To Pay Attention! by The Elephant's Child

Getting regulations right is always hard, and usually the fewer regulations imposed, the better.  Some regulation is obviously needed, or we would all crash into each other in intersections.  If budgets are tight, it’s often easier to raise taxes than to cut expenses. That’s why we admire New Jersey’s Governor Christie so much. Legislators who do not adore increased revenue are few and far between.

In January, Oregon voters decided that it was a good idea to raise taxes on (are you surprised?) the rich to increase revenue.  Measure 66 passed 54–46 on January 26, to increase funding for “education, health care, public safety and other services.”  (I’ll bet they said “for the children” too).  It increased the rates from 9% to 10.8 % on single filers earning $125,000 to $250,000 a year, and on joint filers earning $250,000 to $500,ooo.

For individuals pulling down more than $350,000 a year and families making more than $500,000, the rate went up 2 percentage points.  A pure envy tax.

The ballot initiative was pushed by aggressive public employee unions.  The supporters spent $6.9 million campaigning for Measure 66 and for Measure 67 telling voters that 66 alone would raise an additional $472 million.

Envy doesn’t pay.  Tax revenues went down.

Oregon’s revenue forecast predicted that tax collections through July 2011 will come in $577 million short of the budgeted amount, because of lower-than-expected personal income-tax collections.

“Capital will go where it is wanted and stay where it is well treated.  It will flee from manipulation or onerous regulation of its value or use and no government power can restrain it for long.” (Walter Wriston: The Twilight of Sovereignty)

In New Jersey, from 2004 to 2008, $70 billion in wealth left.  Moved.  They fled a tax code that punished success.  Same thing happened in Maryland.  Millionaire tax — they lost one-third of their millionaires on their tax rolls, and tax collections were $100 million less than before the tax was raised.

Governor Christie is proposing a sweeping privatization effort in New Jersey, and vetoed, in May, the legislature’s income-tax surcharge on millionaires, and the legislature could not override the veto. Taxing wealth and productivity may sound like a good idea.  The evidence proves otherwise.

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