Reply to Maryland Losing More High Income Residents Due to Tax Rates

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]WEALTHY PEOPLE DO NOT LIKE PAYING TAXES

Wealthy people usually have two homes.  Florida is nice in the Winter.  Claim Florida residence and save a fortune.

I know of people that pay a friend to spend a preset amount of money each month (on a credit card) just in case they need prove they were in the state often enough to claim primary residence.  If you don't think that this and a whole bunch of other shenanigans are going on then you're a fool.  Maryland's tax structure is turning this practice into an Olympic event and is costing the state dearly.

And for those that didn't know, Maryland's income tax rate is 6.25% on $1 Million and over.  Do the math.

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OK, Let's do the math. Since they claimed most of those fleeing (ha) went to VA, we can start there:

Income         VA Tax         MD Tax
$1 million     57K             55K
$2 million     115K           125K
$3 million     172K            187K

Lets take that guy making $2 million a year.  He's a lawyer and his billable rate is $650/hr.

He's not going to pull his kids out of school and commute across the beltway to his $2 million / yr job in order to save $10K in taxes.  In fact, if it adds even 10 minutes to his commute, which works out to 80 hours of time lost a year, he would rather have the time than the 10 grand. After all that 80 hours is worth $52K if he bills them instead of drives them.

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http://online.wsj.com/article/SB124329282377252471.html

maryland tried this once before. They did  not even come close to the revenue they expected. It is not just the state taxes. Add in MoCo and the taxes never stop. Not all these people are commuting every day. Top lawyers at these firms are traveling a great deal or doing lots of work at home so your analysis does not apply as well as you think.

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We already debunked the WSJ article months and months ago.  You can google it.[/quote]

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