There was an interesting story in the Washington Examiner today. Over in Montgomery County...the county political machine got together and forged a nifty tax deal which was directly aimed at millionaires. For a brief time....it worked.
Then...the county started to notice revenue amongst its population gone. Actually, they now say that between 2007 and 2008...the county lost revenue income amounting to $4.6 billion. There are several beliefs here...that some folks simply lost a chunk of their money (possible), some folks died, and then they come to the idea that folks packed up and left.
This wouldn't matter much...except they are lost at this deficit of $761 million.
The millionaire tax? Well...if you make $1 million....you pay 6.25 percent on that. Thats the local method of getting at your money when the state and federal government hasn't done enough.
How many left? Presently...the county is showing 216 of these folks gone...which is bothering a good number of the guys in charge of the county.
Some of the leadership have been told that folks just said "enough" and left while they had a chance. Some folks have countered this argument...saying that millionaires haven't left California and New Jersey when they did their big millionaire tax.
I pondered on this a while and read up on both New Jersey and California. It's a curious thing. Both states started a status which is the 'part-time' resident situation. If you own a house and basically limit your time to something like 30 to 60 days a year in the state...you disqualify yourself as a full-time guy and avoid alot of these taxes. So the California and New Jersey millionaires got smart and just found another house in another state...moved into it and play the 'visit' game.
What does Montgomery County do now? They could get tough and try to track down the absent millionaires...but I'm guessing they've got themselves safely into Delaware or West Virginia.
The county could sit down and start cutting...but frankly, you'd have to carve up police and fire services...along with library hours cut in half....and probably avoid all road construction for the next twelve months.
Chasing the millionaires away? Yes, they may have done something stupid. You see the same logic in DC with senators and representatives. Eventually...these rich guys pay some lawyer and tax consultant....to advise them on what country to park their millions....and they quietly move the money. Whatever gain was imagined...rarely ever occurs. So you just lose more money.