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Ehrlich: Maryland's millionaires have taken flight

Bob and Kendel.jpgFormer governor Robert L. Ehrlich Jr. (R), who is gearing up to run again, on Saturday stoked a debate over whether Maryland's so-called "millionaires' tax" is driving high-income earners out of the state.

Maryland has seen about a one-third decline in the number of millionaire filers since the state imposed a three-year surcharge in 2008. The measure was part of a package designed to make up revenue lost by the repeal of an unpopular computer services tax.

On his weekly radio show Saturday, Ehrlich pointed to an online Wall Street Journal opinion piece that seeks to make the case that Maryland's "soak-the-rich theology" has prompted many of the state'stop earners to relocate -- taking their talents and tax dollars with them.

Saturday's show on Baltimore's WBAL featured some "I-told-you-so" banter between Ehrlich and his wife, Kendel, who co-hosts.

"This is not exactly my toughest prediction," Ehrlich told his wife after she noted he had warned of this outcome at the time the surcharge was adopted. "Successful people tend to leave. ... It's class warfare. It's just lousy policy."

Gov. Martin O'Malley (D), who supported the surcharge, continues to believe such arguments are misguided, a spokesman indicated Saturday.

Most analysts have suggested the largest reason for the dropoff in income reported by millionaires is that they made less money during the recession, particularly on capital gains -- which the Journal piece acknowledges is a contributing factor.

The governor "believes the global economic meltdown has had an impact on every Maryland family," said Rick Abbruzzese, O'Malley's communications director.

Others have suggested that the hassle and cost of moving is a large deterrent to trying to escape the surcharge, which is scheduled to expire at the end of this tax year.

Once the surcharge expires, Maryland's top marginal tax rate, applied to income above $1 million, would return to 5.5 percent from 6.25 percent.

Some lawmakers have proposed keeping the surcharge after 2010, but O'Malley opposes that, Abbruzzese said.

By John Wagner  |  March 13, 2010; 2:42 PM ET
Categories:  2010 Elections , John Wagner  
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The problem with our tax system is that it is upside down - we pay the most to the Feds, who provide very few services.

We need to turn this around, such that the Feds get 2-3% (to provide for defense), give the state 7-10%, and then give the rest to local govt.

Time to stop paying taxes that benefit someone else!

Posted by: b1978367 | March 13, 2010 7:11 PM | Report abuse

The WSJ column said that 1/8th of the millionaires who filed in 2007 in Maryland filed NO return at all in 2008: they died or they moved. Losing 12.5% of your millionaire's all together is a significant loss because it is not as if they made less money and still paid into the system, they paid nothing.

Posted by: h20andoil | March 13, 2010 8:06 PM | Report abuse

I have looked into moving to Florida and the savings are substantial. If you live in Florida for six months and a day out of the year you don't have to pay Maryland income taxes or the inheritance taxes when you die. For an estate of ten million or more your savings to your heirs are over one million. You save up to 9.3% on your regular income taxes each year when you move to Florida for half the year too.

I love Maryland, have a fourth generation family here but love my daughter more. I can stand to live in Florida for half the year so I can give her more than a million more when I die.

My money was made by me fair and square and taxed too. I do nothing illegal. Why do the democrats figure I should pay more than them? Did they put in the 70 to 80 hour weeks to earn their money? Did they save their money and make risky ventures work to attain wealth?

Democrats are thieves and should be ashamed of themselves. All the democrats do is suck off tax payers. Democrats are worthless people.

Posted by: charlietuna666 | March 13, 2010 8:59 PM | Report abuse

sure, go to florida....wait until you check that disaster....collapsed economy, gazzillions of illegals such as to make a spartan sob, thieves of every hue and cry imaginable, traffic that makes 495 look like a country public transportation, no culture, out of control property and insurance costs...sure, floriduh, go ahead.

Posted by: SofaKingCool2009 | March 13, 2010 10:16 PM | Report abuse

We send huge chunks of money to Washington under penalty of law and see no benefit. I'm buying two wars that don't make me feel safer. The oil companies may believe "their" oil in the ground is safer. If that's so, why don't they fund the wars? If some of the geniuses we hire into the Federal Government to do planning had detected a problem with unlocked cockpits and the potential to turn a passenger jet into a weapon of mass destruction, the delusional Muslim boys would not have had an opportunity to carry out 9/11 and Americans could have saved a coupla trillion dollars. Congress hasn't even seen fit to send me an annual prospectus or status report so that I can see what I'm buying, how much it costs, and judge whether I'm receiving value for my money. Much of what I earn goes directly to the government under the withholding rule. I can't invest the money for a year and then send it in because then people would irresponsibly spend it and have nothing to send in at tax time. We can't have health care reform because it violates Republican principle #1: never cause grief at major business entities. But that means we cannot better manage the money that is destined to pay for health care. Would I choose to compensate some stuffed shirt CEO for his brilliant attempts to chalk up profit gains by terminating coverage for sick people for specious reasons? No. I'd sooner take him up in his private plane and push him out. Hypothetically, of course. So millionaires are leaving Maryland. Good. Don't let the door hit you on the way out.

Posted by: BlueTwo1 | March 13, 2010 10:48 PM | Report abuse

What? When you raise taxes people leave?
You know the worst tax of all? Its the Federal Gov't creating trillions of dollars to "help" the economy. Devaluation of the currency is the worst tax of all.

Posted by: shred11 | March 13, 2010 11:12 PM | Report abuse

Every public service in Md.cost way more that most states!
Any time a state uses only tax increases to balance it's budget,not just the rich, but many others will find less expensive states to relocate to..
I know I can't wait until I see Md. in my rear-view mirror......And I'm way far from being rich...Bearly independent!

Posted by: sdavis4 | March 14, 2010 4:13 AM | Report abuse

I just feel awful for those millionaires. Is their some kind of charity I can send my money to to support them?

As a matter of fact, on average most millionaires also require more services that are provided by the government then those of lower incomes since they live often live on larger propertis which means more money for roads and highways, utilities, police and fire service, etc.

We should make these taxes federal so they have nowhere to run.

Posted by: Baltimore137 | March 14, 2010 10:06 AM | Report abuse

Please run Bob! Please! I will even work on your campaign if you promise not to let the Bay clean up efforts go.
This state is just a tax bleed. It's almost like they don't want people to make and save a lot of money. Is there something wrong with that? Maryland has become a very sorry state to live in.

Posted by: FiatBooks | March 14, 2010 10:45 AM | Report abuse

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