13 Apr Rich People LOVE Paying Taxes??
Sometimes I hear things on CNBC so early in the morning that I just assume I heard them wrong, and need another cup of coffee. Other times, I know I heard them correctly, and I just assume that sometimes tremendously challenged people are being handed a microphone.
David Callahan of the Demos public policy center informed the television audience that “rich people do not move out of states just because of a few percentage points in their taxes”. He explained in all his economic brilliance that there is no proof that higher taxes depress economic activity, and pointed out that the economy surged when Bill Clinton raised taxes in the 1990’s.
(A) Bill Clinton CUT capital gain taxes, he did not raise them. His Presidency also coincided with the largest technological boom in the history of mankind, and everyone knows it. He also signed NAFTA into law, and presided over a period of time that can best be described as “awesome global expansion”. I mean all this as a compliment. Can you imagine how well it would have gone without that marginal income rate bump?
(B) But this is why I am blogging – the idea that “rich people do not move out of a state because of taxes” is the most absurd thing I have ever heard someone who started his own publc policy think tank say. Most people who start their own public policy think tanks realize that, already having very limited economic value to the world around them, it would be good for them to not say stupid things about the actual people out there who do actual real work. David Callahan and the Demos Center represent the most insidious kind of economic ignorance. Would someone like to see the numbers on California residents that have moved to Nevada, Arizona, Colorado, Idaho, Texas, and Florida in the last ten years? Do you think “just a couple percentage points” affected those decisions, or was that a by-product of the superior dining alternatives in Idaho than those California has to offer?
Economics is the study of incentives. Period. The left does not care about good economics because for them it is an ideological pursuit, and that ideology is collectivist at its core. Callahan may not be as stupid in real life as he sounded this morning. But if he is not that stupid, then it is worse, because then he is just plain dangerous. Incentives matter, my friends. And the time has come for states to realize that their policies do affect the behavior of their residents. If Sacramento would learn this lesson, maybe Washington DC would as well.