CLT Memo to the Legislature
Tuesday, June 13, 2017
the Sixth Time – NO to a Graduated Income Tax
Maryland imposed the so-called millionaire's tax in 2008 along with
several other measures to help close a $1.7 billion budget gap.
And Gov. Martin O'Malley, a Democrat, does not intend to bring it
back, instead promising to wipe out a projected $1.2 billion budget
gap with spending cuts. . . .
Taxing the rich is more politically feasible than other tax options,
said Joe Henchman, director of state projects for the Tax
Foundation. It divides the opposition because elected officials can
tell the majority of residents, “Don't worry, you won't be the ones
paying these taxes,” he said.
January 13, 2011
tax on the way out
“One year later, nobody's grinning. One-third of the millionaires
have disappeared from Maryland tax rolls. In 2008 roughly 3,000
million-dollar income tax returns were filed by the end of April.
This year there were 2,000, which the state comptroller's office
concedes is a 'substantial decline.' On those missing returns, the
government collects 6.25% of nothing. Instead of the state coffers
gaining the extra $106 million the politicians predicted,
millionaires paid $100 million less in taxes than they did
last year — even at higher rates....
All of this means that the burden of paying for bloated government
in Annapolis will fall on the middle class. Thanks to the futility
of soaking the rich, these working families will now pay Mr.
O'Malley's "fair share.”
The Wall Street Journal
May 27, 2009
Millionaires Go Missing
taxpayers fight back.
A Bank of America Merrill Lynch analysis of federal tax return data
on people who migrated from one state to another found that Maryland
lost $1 billion of its net tax base in 2008 by residents moving to
other states. That's income that's now being taxed and is financing
services in Virginia, South Carolina and elsewhere.
The Wall Street Journal
March 12, 2010
Income tax rates go up,
rich taxpayers vanish.
Christopher Summers, president of the Maryland Public Policy
Institute, says Maryland had an enviable tax policy prior to 2007,
but changes gave the state a “perception of a toxic tax environment”
in which businesses and wealthy individuals are eager to leave.
“They are pushing accumulated wealth out of the state. People are
willing to work here, but not dumb enough to die here.”
The Maryland Public
October 29, 2013
Tax flight: Millions
lost as wealthier residents leave Maryland
“A state cannot balance its budget on the backs of the 1 percent
most productive citizens,” according to a Heritage Foundation
analysis. “They will leave and they are leaving. Americans are
voting with their feet to keep more of their income.”
Maryland’s Comptroller agreed, concluding that the state’s
population of millionaires decreased by one-third to around 2,000 in
The Daily Caller
September 1, 2015
Affluent Taxpayers, Jobs
Fled Maryland Under O’Malley
"Don't tax you, don't tax me, tax that fellow behind the tree!"
— U.S. Sen. Russell B.
Sponsor of the Earned
Income Tax Credit
Dear Representative or Senator;
Tomorrow you are expected to vote to put another graduated income tax on
the ballot in 2018. This will be the sixth time this scheme to
overturn the state constitution’s historic flat income tax has been
attempted under different guises. Under our state’s flat tax every
taxpayer pays the same rate independent of the amount of that income.
What could be more “fair” than that eludes us, and voters have always
agreed. All five previous attempts have been resoundingly defeated on
There are five solid reasons to vote “NO” on this proposed
Massachusetts is an already heavily taxed state. We don’t need to
reinforce the image of Taxachusetts. The voters are angry enough about
higher taxes as evidenced by their rejection of the automatic gas tax
increase on the 2014 ballot.
This so-called “millionaire’s tax” will just drive millionaires out of
the state, as Maryland’s misguided experiment proved. It could be as
simple as picking up a laptop and moving a few miles north. The
millionaires who have been providing hundreds of thousands –
collectively hundreds of millions – in state income tax revenue would
then contribute ZERO. Along with Maryland’s example this has been the
demonstrated results in New Jersey, California and other states. It
would kill the golden goose – resulting in an even greater burden being
imposed upon non-millionaire taxpayers who will inevitably be expected
to make up the difference.
Article 48 of the State Constitution prohibits certain subjects from
appearing on the ballot. An appropriation of money is one of them.
Therefore, the extra revenue that supposedly would be generated by this
tax would NOT go directly to education, repair of roads and
bridges, public transportation, etc. as proponents falsely claim.
Instead it would all go directly into the general fund to be spent at
the Legislature’s discretion, as is all other revenue.
Gov. Baker has recognized this. In a recent interview he stated:
“There are a lot of people that have spent that millionaire’s tax six
ways to Sunday already, and it hasn’t even made it to the ballot yet.”
Case in point: When the gas tax was increased from 11 to 21 cents in
1990, it generated an additional $120 million in revenue. All that
money was supposed to go to the highways and bridges. Instead, as
AAA pointed out at the time in a scathing editorial, only $7.4
million actually went for its intended purpose.
Does anyone really think if the proponents of the “millionaire’s tax”
finally got their wish, that they will stop with millionaires? Once the
Commonwealth’s historic flat tax is abolished – and that is what this
proposed amendment would do – the power to constitutionally tax at
different rates will have been established. It will be only a matter of
time before the rest of us will eventually become their victims.
Lest we forget: The usual cast of characters who opposed Proposition
2½, the reduction of the auto excise, the elimination of the 7½% income
tax surtax, the income tax rollback – all which they couldn’t defeat –
and the last graduated income tax ballot question that was soundly
defeated are now behind this sixth Grad Tax assault.
Maryland experimented with a “millionaire’s tax” in 2008 – but
fortunately its legislature and governor did not handcuff themselves
with a constitutional amendment. They wisely included a “sunset” date
at which it would need to be reevaluated and reauthorized. When they
recognized the disaster it had wrought, the experiment was terminated.
What is proposed in the amendment on which you will vote will be locked
into our state constitution, an arduous process to amend. When the
results are recognized, like turning around an aircraft carrier there
will be no swift means to reverse direction, to rectify the mistake
before even more damage is wrought upon the Massachusetts economy and
its less-than-millionaire taxpayers.
urge you to vote “NO” on this misguided proposal. We hope you don’t
make the voters need to do it for the sixth time.
Citizens for Limited Taxation ▪ PO
Box 1147 ▪ Marblehead, MA 01945