With self-avowed congressional socialists adding a wealth tax to their wealth-transfer manifestos, here’s a look at what enterprise-punishing taxation hath wrought. Not in Marxist hellholes like North Korea, Venezuela and Cuba, but in U.S. states.
A feature in USA TODAY ranks states by their tax burdens. The state with the lightest tax (6.5%) is Alaska, while the state taking the biggest tax bite is — wait for it — New York. Alaska has a high property tax, but no state income or sales taxes. South Dakota, Wyoming, Tennessee and Louisiana (with a 7.6% tax bite) hold the closest light-taxation spots.
New York grabs 12.7% of residents’ income, levying some of the highest income and property taxes in the nation, but charging fairly low sales tax. The Empire State’s closest high-tax brethren include Connecticut, New Jersey, California and Illinois (which nabs 11% of residents’ wealth, for the “misery spread”).
The 2017 tax reform’s state and local tax deduction cap curbed lower-tax states’ subsidizing of high-tax states. The worst-taxing states such as New York and California are seeing better-off citizens voting with moving vans — taking their pocketbooks with them. N.Y. Gov. Andrew Cuomo blames SALT reform, rather than his state’s politics of covetousness, for New York’s lost revenues and residents.
Despite the loss of wealthy residents to more reasonably taxed states, officials in places like Connecticut, Rhode Island and Illinois are doubling down — pursuing higher tax burdens while continuing to construct their own little redistributionist welfare states.
The flip side comes in a Barron’s report. Barron’s says Wyoming “surprisingly topped the list of states with the largest percentage of income from [2015] capital gains, some 12.3%. Wyoming also has the highest average income among those making over $1 million annually, just shy of $5 million. It isn’t just that Wyoming has the Jackson Hole ski resort to attract the well-to-do; it also doesn’t have a state income tax.”
European social democracies such as Denmark and Sweden ended their wealth taxes. Yet some American pols willfully embrace a politics of envy and ignore facts. A wealth tax, estate tax hike, punitive tax rates, socialized medicine, the Green Raw Deal, eminent domain on (to start with, drug) patents — it all comes from the same cut of cloth.
We’re seeing, from both socialistic federal and state politicians, what Karl Rove has called “a deep hostility to wealth” illustrated by a leftist's tweet: “Every billionaire is a policy mistake.”
“You cannot bring about prosperity by discouraging thrift,” Abe Lincoln said. “You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot keep out of trouble by spending more than your earn. You cannot build character and courage by taking away man's initiative and independence. You cannot establish security on borrowed money. You cannot help small men by tearing down big men. You cannot help men permanently by doing for them what they could and should do for themselves.” Some politicians and states are enlightened enough to recognize such wisdom.