Rob Shrum of the Tax Foundation’s Tax Policy Blog applauds Governors Tim Pawlenty of Minnesota and Chris Christie of New Jersey for vigorously opposing efforts by Democrats in their states to impose targeted tax increases on the rich:
As the Tax Foundation has written in the past, it is bad tax policy to rely on targeted “millionaire’s tax” rates. The state’s citizens aren’t genuinely supporting expanded public services if they’re getting someone else to pay for them. When the money runs short, and it will since there are only so many millionaires (As outlined clearly in the case of New Jersey), the stomach won’t be there to save the new spending.
State budgets that rely disproportionately on high-income earners are volatile ones, since such earners’ incomes are exaggeratedly good in good times and exaggeratedly bad in bad times. And last but definitely not least, enacting such taxes sends the signal that you’d rather penalize the entrepreneurs and job creators rather than force everyone to pay for the services they demand or cut them back. Such action ignores the fact that the location decisions of highly mobile entrepreneurs are sensitive to state income tax rates.
To attract and keep good talent, create jobs and drive economic growth, state legislators must strive to be competitive with their neighboring states’ taxes rather than rely on targeted taxes that drive their entrepreneurs out.
Kudos to Mr. Pawlenty and Mr. Christie for having the courage to fight these divisive, class-dividing policies. And double kudos to Mr. Shrum for eloquently and succinctly stating why a surtax on the rich is so dumb even Johnny Knoxville would think twice before trying it.
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- Michael Caine to Move to America if Brit Tax Rate Goes to 51%
- Phantom of the Opera Composer Andrew Lloyd Weber Opposes High U.K. Taxes
2 responses so far ↓
1 Vious // May 15, 2010 at 7:32 pm
Exactly
Kudos to those men for refusing tax increases yet not cutting spending like promised thus killing their states deficits
Good job, Govs! You are doing a heck of a job, guys
I say you all cuts the taxes even more and heck….go spending like old Bush.
2 Peter // May 16, 2010 at 1:54 am
Vious,
Governors can’t cut spending, but they can veto tax increases.
And they have. Kudos, Gub’nors.
Oh, and Obama’s spending habits make Bush look like a tightwad.
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