11.30.2010 0

The 10 Year Counting: What we can learn

  • On: 12/26/2010 22:22:55
  • In: Uncategorized
  • By Rick Manning

    “In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. (This was the first census that took place while Quirinius was governor of Syria.) And everyone went to their own town to register.

    “So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and line of David. He went there to register with Mary, who was pledged to be married to him and was expecting a child. While they were there, the time came for the baby to be born, and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no guest room available for them.”—The Bible, Luke 2:1-7.

    The census has been with us for more than 2,000 years, and is so important that the founding fathers wrote it into the U.S. Constitution as one of the duties of the federal government. While the process has changed from the time of Christ, where the people came to the census takers, to a more modern system of counting, the effect is the same — the government knows how many people reside within its borders at one fixed point in time.

    In the U.S., this decennial census has the impact of deciding how many congressional districts each state gets, and the eligibility of the state for various federal government tax distribution programs.

    One unintended consequence of the 2010 census is that it reveals a simple truth. People move to states which have lower taxes, and away from high tax states. This is reflected in the apportionment of seats in the House of Representatives: high tax states New York, New Jersey, Michigan, Illinois and Massachusetts lost 6 seats, while zero-income tax states Florida and Texas netted 6 new seats.

    We saw this in 2010, when the most famous moving van in sports took self-adulating basketball star LaBron James’ skills to South Beach. The fact that South Beach is in Florida, which doesn’t have a state income tax, might just have played a small role in the decision.

    On a less public scale, the geniuses who run Maryland’s state government decided to impose a “millionaire” tax with the idea of increasing their revenues to support their ever burgeoning welfare state. Just like LaBron, Maryland’s millionaires apparently decided to take their talents elsewhere as the Wall Street Journal reports that the number of millionaires in Maryland declined from 3,000 to 2,000 in just one year after the millionaire’s tax went into effect.

    The WSJ story quotes Christopher Summers, president of the Maryland Public Policy Institute, as explaining the reason for the decline by noting, “Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it’s easy for them to change their residency.”

    The phenomenon of the wealthy moving away from high tax areas to lower tax areas is not confined to just state governments. In the 1970’s, Great Britain had an effective tax rate of just under 95 percent for the wealthy, meaning that the taxpayer got to keep one shilling for every twenty shillings earned. The Beatles wrote about this phenomenon in their song on their Revolver album called “Taxman,” with eerily familiar lyrics,

    “Should five percent
    Appear too small,
    Be thankful I don’t
    Take it all.

    “’Cause I’m the taxman.
    Yeah, I’m the taxman.”

    But John Lennon, Paul McCartney, George Harrison and Ringo Starr didn’t just sing about hating taxes, they did something about it. According to numerous sources, Apple Records was at least partly, a scheme to avoid paying taxes.

    However, even if the left, that continues to cling to the notion that the wealthy will just stay put no matter how high the tax rate, only listened to John Lennon’s socialist anthem, “Imagine”, they would be hard pressed to miss how other music icons have moved to avoid onerous tax rates. Icons like the Rolling Stones’ Mick Jagger who escaped Great Britain’s tax system by moving to the south of France, where one publication lists him as the top “tax exile” in the world, and Phil Collins, who is number ten on the list.

    Given this history, no one should be surprised that the just released U.S. Census shows that Americans, are also behaving rationally by flocking from high tax states to low tax one’s, and that those who are left behind are often those who use the very government services that have driven the tax payers out of the state.

    So the question is simple, are those who continually look for ways to soak the rich merely ignorant of history, or do they just choose to ignore it?

    Rick Manning is the Director of Communications for Americans for Limited Government.

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