Yeti_Poet t1_itxki78 wrote on October 27, 2022 at 1:06 AM

Reply to comment by modernhomeowner in PSA: Vet your Sources [Question 1] by RonBurgundy35

We aren't about the same as our neighbors, we are lower than nearly all of them. And they have progressive tax structures. MA is coming in line with the region. New York's 10.9% at the top of their structure will still be higher than us. Vermont's 8.75% will be almost the same. Other neighboring states are around 7%. It's just flatly wrong to frame a 9% income tax as exorbitant or out of line for our region. I find it amusing that your last paragraph is you just saying "but of course I will never have evidence to support my claim."

But you do say you are worried about revenues. Are you genuinely suggesting that you think tax revenues will fall if this passes? That is what you are using as a frightening outcome here to try and persuade people to your side. You think the net effect will be LOWER tax revenues? Or are you willing to admit that that is just another fantastical scenario?

asoneth t1_itzctac wrote on October 27, 2022 at 12:42 PM

I think this is the best way of thinking about it.

I would be much more enthusiastic if the ballot initiative had picked 7% to be in closer alignment with our neighboring states and still substantially lower than the premium charged by states like NY and CA.

It is perfectly reasonable for FL and TX to compete on price to attract residents just as it's perfectly reasonable for other states to charge a premium and focus more on quality of life and amenities. The nice thing about the laboratory of democracy is that we get to see what people actually value and states can respond accordingly.

modernhomeowner t1_itxn037 wrote on October 27, 2022 at 1:25 AM

I truly am concerned that this backfires and I'm the one that gets less stuff out of it. Less teacher in the classroom for my kids, or more taxes for me because rich people, who pay the majority of taxes in this state, leave and I'm the one without. I don't count NY as a neighbor to the hub of Boston where most people live, I count Maine at the highest 7.15, RI at 5.9 and NH at 0 wage 5 investment as neighbors, although you can fairly call me out for being eastern-centric, but that is where the majority of people in this state live.

If we had a surplus this year, why risk it, why even take the chance that we could be worse off? I will tell you right now if my state taxes went up 72%, I'd be pretty pissed off and would leave, and my extra 72%, is nowhere near the dollar amount of a rich person. I just think everybody has blinders on thinking that rich people will just roll over and after being called all these greedy names during the election cycle, having their picture sent on postcards with their salaries or net worth as if they are bad people, why the heck would you stay in this state after that?

Yeti_Poet t1_ity06hk wrote on October 27, 2022 at 3:10 AM

So assume it doesn't backfire. We institute a progressive tax, a year later revenues don't go down because of move-outs but instead are up as expected, and the wealthy pay a larger share -- you then think it's a good policy?

asoneth t1_itze6ap wrote on October 27, 2022 at 12:53 PM

This is an important and valid concern that I share as well. If it helps you sleep better at night, the most thorough analysis I've seen concludes that:

"Together, cross-border moves and tax avoidance would reduce millionaires tax revenue by roughly 35 percent [to $1.3 billion]. (Absent these responses, the tax would be expected to raise $2.1 billion in 2023.)"

Via: https://cspa.tufts.edu/node/406

So it seems that 9% is still low enough to be a net positive from an income tax revenue perspective. (Though local property taxes may also take a small hit.) It won't raise as much as many people expect due to tax avoidance, but it also probably won't result in lowering the state's overall tax revenue.

Still, I would feel much more confident voting yes if they had chosen something like 7% as the top marginal tax rate to be more in alignment with the average of our neighboring states to test the waters. Going from a flat rate straight to a CA/NY/NJ/VT-level marginal rate overnight seems unnecessarily risky.

modernhomeowner t1_itzevib wrote on October 27, 2022 at 12:59 PM

Exactly, that's fairly exactly what I told my wife. I think 6% at $1M, 7% at $5M... I would have voted for that... And not sending postcards personally attacking people. It wouldn't have seemed like such a personal attack on those people, which to me, the personal attacks is going to make people move who were on the fence over the tax rates. I think the Yes superpac, the way they are proposing this by attacking people, is going to create more tax avoiders than analysts would otherwise expect, which is why I think we will become net losers.