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Oregon proves raising taxes on rich lowers revenues

December 22, 2010 05:33

Oregon voted to raise taxes on the top 2% of earners last year and saw revenues drop by one third.

“In 2009 the state legislature raised the tax rate to 10.8% on joint-filer income of between $250,000 and $500,000, and to 11% on income above $500,000. Only New York City’s rate is higher. Oregon’s liberal voters ratified the tax increase on individuals and another on businesses in January of this year, no doubt feeling good about their “shared sacrifice.”

Congratulations. Instead of $180 million collected last year from the new tax, the state received $130 million. The Eugene Register-Guard newspaper reports that after the tax was raised “income tax and other revenue collections began plunging so steeply that any gains from the two measures seemed trivial.””

And it seems Oregon is not unique in its results. WSJ adds:

“All of this is an instant replay of what happened in Maryland in 2008 when the legislature in Annapolis instituted a millionaire tax. There roughly one-third of the state’s millionaire households vanished from the tax rolls after rates went up.

If Salem officials want to find where the millionaires went, they might start the search in Texas, the state that leads the nation in job creation—and has a top income and capital gains tax rate 11 percentage points lower than Oregon’s.”

The voters in Oregon and Maryland may have actually thought that they could fill their budget gap with more revenues from the ‘the wealthy’ who already pay a disproportionate share of the tax burden but the more likely reason for such tax increases is ideology.

Both states are very ‘blue’ meaning mostly Democrats. Obama reflected the tax ideology of the typical Democrat in his 2008 campaign when he said he would raise the capital gains rate even though it has always proved to result in LESS revenues to the treasury. His reasoning? “For purposes of fairness'”. He said so in a Democrat debate with Hillary.

A Gallup poll recently showed that Democrats and liberals are mostly socialists:

“A majority of 53% of Democrats have a positive image of socialism, compared to 17% of Republicans.

Sixty-one percent of liberals say their image of socialism is positive, compared to 39% of moderates and 20% of conservatives.””

There are many examples showing that liberals and Democrats today are socialists. Socialism is defined as:

“(in Marxist theory) the stage following capitalism in the transition of a society to communism, characterized by the imperfect implementation of collectivist principles.”

In Karl Marx’s Communist Manifesto the number two measure needed to eliminate capitalism and establish communism is “A heavy progressive or graduated income tax.” Its all about ‘fairness’ not raising revenues. Liberals and Democrats want to punish those who may have worked harder and been more successful. They especially want to punish those who have engaged in commerce instead of a career in academia or public employee unions.

This is also the attitude of the Obama administration and majorities of both houses of the 111th congress. The facts don’t matter. They continue to spend the US into bankruptcy in some utopian hope of punishing anyone who succeeded in capitalistic endeavors to prove to themselves that their failed philosophy of ‘spreading the wealth’ and ‘fairness’ also known as socialism works when it never has and never will.

Alan Greenspan summed it up well when he said “Deficit spending is simply a scheme for the confiscation of wealth.”