SPEAK OUT: Are Taxes Driving Out Maryland's Millionaires?

A controversial new study generates debate online.

A study by the anti-tax group Change Maryland , which finds that a "millionaire's tax" may be driving out the state's wealthiest citizens, is generating controversy online.

The study reports that a net 31,000 residents left Maryland between 2007 and 2010, the span of Gov. Martin O’Malley’s millionaire’s tax, according to CNBC.

The tax imposed a rate of 6.25 percent on those with incomes of more than $1 million a year, CNBC reports. It expired in 2010.

“Maryland has reached the point of diminishing returns. We're taxing people too much and people are voting with their feet," said Change Maryland Chairman Larry Hogan, according to CNBC. “Until we change our focus from tax increases to increasing the tax base, more people are simply going to leave, leading to a downward spiral of raising revenues on fewer citizens."

According to the study, the tax actually cost Maryland $1.7 billion in lost tax revenues.

O’Malley’s office, however, blasted the report. Director of Public Affairs Rick Abbruzzese calls Change Maryland a “GOP-led, partisan organization” and argues that the non-partisan Phoenix Institute found the number of millionaire households in Maryland increased 19 percent during the O’Malley Brown administration.

The Maryland Reporter wrote today, however, that Pheonix measures those with assets of $1 million or more, not incomes of $1 million or more.

“It is a lot more rare to have $1 million or more in annual income, and we do know that those numbers of Marylanders have declined since 2007 when they peaked at 8,652,” according to the Maryland Reporter.

In a Tuesday blog post, the Tax Foundation said Abbruzzese’s statements “mis-stated tax comparisons” and “cherry-picked” data.

What do you think? Have the numbers of Maryland's millionaires declined, and if so, is the decline related to taxes? Tell us in the comments.

snapfish July 12, 2012 at 01:34 PM
also want to add that the catch-22 of MoCo - large corporations like Northrop Grummen have all gone over to VA where taxation in lower. so,due to high taxation, we are pushing out jobs that can create a higher tax base for moCo leaving the rest of us to take the brunt. meanwhile this also means trouble for the state and no pay raises for many in years - yet taxes continue to rise. at some point, the county is going to collapse. not the place it was 25 years ago............
snapfish July 12, 2012 at 01:39 PM
that's a good point. it may just be that people who make that type of income have a life's worth of career behind them and are moving out due to retirement and do not want to pay state income tax on retirement (such as in PA). there are many baby boomers and they are likely retiring and leaving in droves and taking their money with them.
William Smyth July 12, 2012 at 04:47 PM
I hate to state the obvious, but taxes are a necessary part of a functioning and healthy society. Stinginess and a do-for-yourself attitude only make us look like rodents climbing over one another to escape a sinking ship. I barely make a tenth of the income discussed above, but I gladly pay my taxes. Am I supposed to feel bad about someone who earns 10 times my annual salary having to pay 10 times the amount of taxes that I do? Am I supposed to be surprised that some people with wealth try to find ways to keep more of their wealth despite the effects that it may have on the rest of society? Maybe this state will be better off if the residents that stick around do so not because they can find tax breaks and loopholes, but because they actually want to be residents of Maryland and are willing to pay their due taxes in order to see this state, and it's people, prosper.
Democracy Works July 12, 2012 at 04:55 PM
Hey snapfish - are you one of the people belly-aching over the Montgomery County government giving Costco millions of dollars in tax credits for the proposed Wheaton location? Montgomery County has the same problems as Long Island, NJ, CT, and MA outside of Boston. Big Corporations left those areas long ago as well. Maryland State, like the Federal Government, has a spending problem. Maryland has fantastic infrastructure compared to Pennsylvania whose highways in the Pennsyltucky region are embarrassing. Maryland's taxes on cigarettes and Estates are high (my husband died living on Long Island), but they are no where near as high as New York. Maryland has voted to give their State Employees decent pensions, but how is that money being invested? In Fiscal Year 2011, The MoCo Board of Education wired $16,697,427 to Deutsche Bank. When the Parents Coalition asked what that money was for, they were given a copy of a contract without the Amendment listing the items or services. Can you imagine if $16 million was Deutsche Bank's fee for managing the MoCo teachers pension funds? Ask your representative what happened to the Snow Emergency funds earmarked for 2012. This past winter, Garrett County Maryland almost maxed our their budget this year, even though they received significantly less snow than in years prior. Where is that money going? Governor O'Malley is just like the Federal Government - spend, spend, spend. I used to really like O'Malley.
Stuart Klein July 12, 2012 at 08:41 PM
The new taxes helped me convince my wife that its time to move out of this hell hole of a state and Montgomery County. Why people in the County keep electing the same tax and spend liberals who treat the county as the state's ATM amazes me. Maybe they'll wake up when O'Malleys retroactive tax increase hits them, but I doubt it. Virginia will be our new home ASAP.
Patrick J. McDonough July 13, 2012 at 12:17 AM
PATRICK What is driving all elderly single and widowed Marylanders out of the state is Maryland,s "INHERITANCE TAX" ( NOT the Estate Tax). C.C., Va., Del have all abolished their inheritance taxes --Maryland insists on keeping its. People need to be aware of this SECOND tax on estates. PUSH this with your state legislators!!!!!
Bob Russell July 13, 2012 at 11:49 AM
I left MOCO and Maryland happily in 2007. As a small business owner all I saw were ever increasing taxes, fees, and a hostile business climate. I live in VA with lots of other tax refuges from the higer tax northern states. Believe me, they are going south in droves.....Bob
Stuart Klein July 13, 2012 at 07:38 PM
Please tell us what your definition of a "living wage" is? And then explain how businesses will have to increase prices to outrageous levels to afford it so that no one will buy their products leading to mass layoffs and more subsidies. Perhaps you should take an economics course from an accredited university.
jag July 13, 2012 at 07:48 PM
Can you explain why? Maryland doesn't have anything to do with your health care costs. Nor, as you state, are you directly affected by people w/an income over a million dollars having a tax burden of 6.25%.
Stuart Klein July 13, 2012 at 07:50 PM
Are you serious? Maryland is becoming a "taking" state with more people relying on the state than ever and that's why taxes keep going up. And people like me, who make a decent salary, are going to keep leaving MD leaving people like you holding the bag to pay for the public employee pensions, etc. Would you send your kids to public school in Baltimore? What have Democrats who have run tthat city forever done to those schools with your tax dollars---NOTHING but people still keep electing O'Malley's to run that city because they get your money.
jag July 13, 2012 at 07:51 PM
"Virginia will be our new home ASAP." You'll have to move pretty far into the boonies. If you think the valuable areas of the state (NoVA) are less Blue than MoCo then you're in for a rude awakening.
jag July 13, 2012 at 07:53 PM
"you are as well off making $25K a year as making $75K a year" I stopped reading here because you, sir, are clueless. I used to make 25K a year, then I made 75K a year, now I make well north of 100K. Yes, there's a difference. Most clueless statement ever (trust fund baby? or just 20 years old?).
Stuart Klein July 13, 2012 at 07:58 PM
TO Jag---it's not the politics (although VA will go R next time and MD never will in our lifetime since it keeps electing Mikulski, a woman with a room temperature IQ). It's the economics. I get to keep more of my hard earned money and only pay a state income tax, getting rid of the MOCO piggy back thievery.
jag July 13, 2012 at 08:15 PM
Stuart, no, NoVa will not turn back to Red in our lifetimes. Arlington is bluer than MoCo will ever be. "[T]he economics" of it is pretty simple. If NoVa were to have increased demand due to its tax structure then the cost of living (e.g. housing) would increase accordingly. If you expect to save money by moving from MoCo across the river, then you're not going to be please. I'd suggest moving to Alabama or something along those lines. None of those "liberals" down there trying to have a high quality of life.
Barry July 13, 2012 at 10:41 PM
Wait for large employers who move out of the State of Maryland, to me, that's the key on how well we are doing business-wise. Marriott Corp threatened to move two decades ago, but that was a bluff. Now, firms like Covance (Rockville) are surveying the market and will make a decision later this year. If more firms decided to move to Northern VA, then we have a problem. Already firms contemplating a move to Northern VA are saying they need to move because of the lack of high tech talent, recruiting, as the main reason.
B Allen July 14, 2012 at 02:20 PM
Kim, I hear you. Maryland drives out businesses with their high corporate taxes and even higher taxes and cost of living. When OWEmalley got into office and they had the first round of tax increases, they put taxes on "computer services" Many of those companies had to raise their prices to their end customers, thus losing their end customer. The MD legislature saw their major mistake, had to repeal that tax because of companies losing business, but the damage was already done. Many of my customers that I sold to had to cancel business or the production never materialized, therefore resulted in an 80% decrease in my income, since I worked on commission only as a mfg rep. The MD area in the high tech industry dropped 75% in the first 3 yrs of OWEmalley. I will be starting another company here soon and it WIL NOT be in MD. I will incorporate either in DE or VA.
B Allen July 14, 2012 at 02:28 PM
Kim, don't listen to jag, I have tried to explain how business works to it, but it never fully understands. It asks dumb questions like about insurance, I am sure you are NOT making the kind of income for the company that you were prior to OWEmally getting into office, but the insurance costs have remained the same, therefore making it outrageous for you. Also, I am sure with the HIGH taxes on businesses in MD (which ranks at the bottom 10 states as business friendly) that is even MORE taken out of your profits. Bottom line, if you can move your company HQ to VA, I would do it. I know a couple of people who have done so and are happy they did. Moving their company gave them an increase in profits. OH, on the insurace, just wait until you have to pay the NObammacare tax, if it does not get fully repealed.
B Allen July 14, 2012 at 02:32 PM
OWEmally and the dumbocraps running this state do not understand how businesses work. Tax and spend, tax and spend and tax some more...oh yeah, while you are at it, don't pay attention to your fees that are increasing and get them confused with the taxes that are increasing. Oh yeah, didn't OWEmally STEAL millions from the transportation fund that is supposed to be illegal in the MD constitution??? He thought he could make MD look better on paper but realized he had to propose MORE taxes at the last forced "special session" to pick more out of your pockets. He thinks we are ALL (yes even you libbies out there) are ATM machines.
B Allen July 14, 2012 at 02:34 PM
Thank you Bernie for the info. I have been giving that info out to people for some time. It is sad that the water toting dems canot see it and still vote the likes of OWEmalley into office. Too bad none of them can see the REAL facts, they just se what they believe and continue to pay more to the dems.
B Allen July 14, 2012 at 02:39 PM
@jag, yet another water toting statement. Too bad you just don't get it and too bad there are more followers like you out there that vote these scumbags into office. I am glad I got out of the dem party when I did so I would not be categorized with the likes of you. Wgatr do they do these days when you sign up as a card carrying dem, suck out 98% of your brains, allowing 2% just for bodily functions and to vote for them? Or do you work for one of those dumbocraps and you feel that you have to defend them?
B Allen July 14, 2012 at 02:43 PM
don't forget the unconstitutional cap and trade tax applied to Mirant by the moco county council, proposed by the nitwit behrliner. His office told me out prices would not go up, hahaha. I told them that is NOT how business works, but they "assured me" guess what, our prices went up. I asked the young lady in berhliners office if she had ever worked in the private industry, her answer was NO... I REST MY CASE. THE PROBLEM IS TOO MANY OF THE DEM POLITICIANS HAVE NEVER WORKED IN PRIVATE INDUSTRY AND HAVE NO CLUE HOW IT WORKS. BTE, berhliner took the tax out of henry waxmans playbook, because he used to work for him, now we have to pay more.
B Allen July 14, 2012 at 02:50 PM
@jag I'd suggest moving to Alabama or something along those lines. None of those "liberals" down there trying to have a high quality of life. Hey nitwit, if we did not have to pay so much in taxes that you dems dump on everyone, we could ALL have a even better quality of life. Even the poor liberals down south. I say cut governement worked in half, because it takes 10 gvmt workers to do that of one private sector worker. Thus cut gvmt spending. Keep the dems hands out of business because they cannot fully understand the concept of private industry, stop the regulating and just sit down, with your hands folded in your laps and shut up. Libs are a bunch of spoiled little brats who think everything should go their way.
B Allen July 14, 2012 at 02:54 PM
@mark, why would anyone want to move to moco for the schools when they can live in NOVA and pay less taxes and have (as you put it) just as good education for their children in VA? If you really want to know the facts, you have just degraded the VA schools by comparing them to MoCo schools. I was told by a guidence couselor at a MOCo high school that 80% of those that graduate from MoCo PS have to take remedial classes when they go to college. Not a statistic to be proud of. Hell, I never knw what a remedial class was until I came to Maryland and Moco
B Allen July 14, 2012 at 03:01 PM
well, I know some illegals that are getting their townhouses paid for, kids are getting educated, utilities paid for, cable paid for, breakfast and lunch at the schools paid for, and the one I kow even had a very large digital TV 4 yrs before I even thought about getting one. Life is good in MoCo if you are illegal. @jag, I doubt you are making that money in private industry, you probably work for the government because your posts are infantile at best. I knew exactly what snapfish meant by the statement when I first read it, you my not so bright friend anr the one that is clueless if you could not understand it...have you taken your pills today?
B Allen July 14, 2012 at 03:05 PM
why Naturelover, because you cannot get anything better than a min wage job??? It is also the taxes we pay for the MoCo county Council approving OUR TAX DOLLERS to pay for all the illegals living in MOCo also. DOn't forget, NObama administration just removed the "work" clause from welfare reform. It stated those that are able bodied should be out there looking for work to receive any government cheese. Well the dumbass in the white house just took that away, now the able bodied can just hang out and get paid for it. NOW THAT IS THE DEM WAY OF LIFE.
B Allen July 14, 2012 at 03:07 PM
DUH Frank, we know that. Northrup Grummen thumbed their nose at MOCO and NOmalley. The corp leaders could see there was a bunch of village idiots running this place. I can't wait for locheed martin to move over there. Also, hopefully Marriott will do the same.
B Allen July 14, 2012 at 03:13 PM
@William, we would gladly pay taxes if they were fair. You have a bunch of idiots who, when tthey see a little bit of money, they go after it and spend spend spend. We see our taxes going up and our services going down. There are way too many people working for the government, not only federal, but in this republic. If they would cut the costs, yours, mine and everyone elses quality of life will go up. There would be more in your pocet to spend, which in turn will increase the economic structure of the US, instead the dems want to drive it down a shit hole. ALL because they are anti business and can't stand people or companies that make a good living or a profit. Just because they are incapable of doing so. Why do you think they are going after Romney like thay are. Romney has done more good for people and the economy in one deal than NObama has done in a lifetime.
B Allen July 14, 2012 at 03:20 PM
Thank you for giving the facts Patrick. What Frank does not understand is that he is going through life with blinders on and toting that demo-crap. OWEMALLEY knows damn right well that the money, property, etc that is inherited has already been taxed and he wants more. Why should those named in a will have to pay tax again? Oh wait, OWEmalley and all the other dems see it just as another way of using residents of the republic of md as atm macines. WHEN THE HELL ARE WE GOING TO RECALL OWEMALLEY? I saw pass a law making it legal to impeace a gov, just like the dems tried in Wisc and lost out because THE PEOPLE are getting wise to their games, lies and deceipt.
B Allen July 14, 2012 at 03:22 PM
Bob, I will be starting a business soon when my patent goes through and I will be incorporating in either DE or VA...just so MD can't get ANY of my profits.
B Allen July 14, 2012 at 03:26 PM
Barry, OWEmalley and the dems policies in MD has driven MANY high tech companies out. Well either out of MD or out of business. 80% of my income was lost due to OWEmalley policies, I was in the high tech industry, working on cmmission. I was making a very good living until he came around. MD is rated 40th in business friendly states...CEO polls show. I can't wait until Locheed Martin moves to VA. MoCo councilmemebers shot their mouths off one too many times and if I was the CEO of LM, I would have flipped them the bird and made the move.


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