Tag Archives: Overseas

How well did tax hikes for the rich work in California?

Economist Art Laffer explains in Investors Business Daily.

Excerpt:

According to a new report from the Golden State’s Franchise Tax Board, the top 1% of earners paid $25.7 billion in state income taxes in 2007. Two years later, the most recent for which data are available, that figure dropped by half — to $12.3 billion.

Researchers note that the economic downturn contributed to this drop. But that’s not the only cause. A huge number of high-income taxpayers have simply left the state.

Between 1992 and 2008, California suffered a net loss of 869,000 tax filers. About 3.5 million moved into California, while 4.4 million left.

Those that left were disproportionately wealthy. The average adjusted gross income for people leaving the state over that period was $44,700. Meanwhile, the average person moving into California posted income of just $38,600.

So California lost wealthier, more productive residents. And poorer, less-productive folks took their places — some of them, at least.

Smothered under a growing thicket of taxes and regulations, the Golden State’s entrepreneurs and top earners have sought friendlier climes — taking their incomes and the taxes they pay with them.

For many people, moving out of California is equivalent to getting a big raise — because their tax rates plummet. Of the top nine states Californians are flocking to, the average top personal income tax rate is 3.44%. California’s is nearly triple that, at 10.3%.

Also, among those nine states, the corporate tax rate averages 4.59% vs. California’s 8.84%. And their combined state and local tax burden is 9%, versus California’s 11%.

Similarly, if tax rats get to be too high, people will just work harder at getting their capital out of the country. In the case of businesses, they will stop hiring people here and instead open factories and plants in other low-tax countries. It’s socialism that causes outsourcing – taxing and regulating businesses causes them to leave or expand elsewhere.

Obama-connected General Electric paid no taxes on $14 billion profit

From the Weekly Standard, a possible explanation of why GE CEO Jeffrey Immelt is tightly linked to Barack Obama.

Excerpt:

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn’t pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.

The fact that GE paid no taxes in 2010 was widely reported earlier this year, but the size of its tax return first came to light when House budget committee chairman Paul Ryan (R, Wisc.) made the case for corporate tax reform at a recent townhall meeting. “GE was able to utilize all of these various loopholes, all of these various deductions–it’s legal,” Ryan said. Nine billion dollars of GE’s profits came overseas, outside the jurisdiction of U.S. tax law. GE wasn’t taxed on $5 billion in U.S. profits because it utilized numerous deductions and tax credits, including tax breaks for investments in low-income housing, green energy, research and development, as well as depreciation of property.

“I asked the GE tax officer, ‘How long was your tax form?'” Ryan said. “He said, ‘Well, we file electronically, we don’t measure in pages.'” Ryan asked for an estimate, which came back at a stunning 57,000 pages. When Ryan relayed the story at the townhall meeting in Janesville, there were audible gasps from the crowd.

Meanwhile, Obama’s General Motors bailout is going to cost taxpayers at least $23.6 billion dollars.

Excerpt:

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.’s steep stock decline.

In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.

The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.

Obama’s millionaires and billionaires get another bailout and taxpayers get the bill.

Related posts

What happened to Illinois businesses when Democrats raised taxes?

Central United States
Central United States

How do Illinois businesses respond to Democrat Governor Quinn’s tax increases?

From CBS News. (H/T Marathon Pundit)

Excerpt:

The Chicago area will soon have a few hundred fewer jobs, while Northwest Indiana will have a few hundred more.

As CBS 2’s Susanna Song reports, sources say Modern Forge is moving from Blue Island across the state line to Merrillville, Ind., and the new town is rolling out the its welcome mat for the plant.

[…]On Tuesday, Indiana succeeded as Blue Island-based manufacturer Modern Forge announced it was moving across the state line. CEO Greg Heim said Illinois made it impossible to stay.

“The environment in Illinois, I would say there was no — we did not see any change coming in Illinois,” Heim said. “Illinois continues to stay on a path of not being – for us – a (pro-business) environment and the excitement and energy here in Indiana, that’s very important to us.”

That’s why, after 97 years in Blue Island, Modern Forge is picking up and moving its building and 240 jobs to Indiana.

“It’s a huge thrill for us,” Indiana Gov. Mitch Daniels said.

Daniels didn’t mince words when he said luring business is the Hoosier State’s #1 priority. And there’s no question that Illinois – and companies like Modern Forge – are main targets.

He claimed that “well over a dozen” businesses have moved from Illinois to Indiana in the past few months. “And it’s not like this just started recently,” he added.

In fact, it really ramped up last year when Illinois lawmakers hiked the state’s income tax. Since then, some businesses have bailed and others threatened to do so, citing high taxes, worker’s compensation issues, lack of incentives and an overall lack of encouragement from the Quinn administration.

[…]According to U.S. Labor Bureau statistics, Quinn needs to do something. Statistics show a steady jobs decline beginning in January, shortly after the tax hike passed.

Daniels said he sees tax concerns in Illinois as a potential Indiana win.

“We’ve had a big upsurge in contacts from businesses who want to explore an Indiana location because the arithmetic tells them it’s less expensive to hire people here,” Daniels said.

And more from the Illinois Policy Institute:

In a trend that continues to worsen, more Illinoisans found themselves unemployed in the month of July.

Illinois lost more jobs during the month of July than any other state in the nation, according to the most recent Bureau of Labor Statistics report. After losing 7,200 jobs in June, Illinois lost an additional 24,900 non-farm payroll jobs in July. The report also said Illinois’s unemployment rate climbed to 9.5 percent. This marks the third consecutive month of increases in the unemployment rate.

Illinois started to create jobs as the national economy began to recover. But just when Illinois’s economy seemed to be turning around, lawmakers passed record tax increases in January of this year. Since then, Illinois’s employment numbers have done nothing but decline.

Data released today by the bureau confirms this downward trajectory. When it comes to putting people back to work, Illinois is going backwards. Since January, Illinois has dropped 89,000 people from its employment rolls.

Democrats complain a lot about companies that outsource jobs. And now we see what causes companies to outsource jobs – Democrats.They cause the very thing that they complain about. That’s insane.