Get Out Before You Die

I saw this interesting piece in the Wall Street Journal today. Apparently the governor of Connecticut would like to see all of his wealthy residents move away:

Florida Governor Jeb Bush ought to send his counterpart in Connecticut, Republican Jodi Rell, a thank-you note with a box of chocolates and a ribbon tied around it. Last month Ms. Rell marked her first anniversary as Governor by signing into law a tax bill that might as well be called the "Palm Beach Economic Development Act."

The law requires that any resident of the Nutmeg State with an estate of more than $2 million pay a death tax of up to 16%--merely for the privilege of dying in Connecticut. The legislators in Hartford hope that the tax will raise $150 million in revenue each year--money that will come in only if the legislators in Hartford are also planning to build a Berlin Wall around the state.

Otherwise, expect a stampede of retirees and family businesses out of Connecticut into the many states without a death tax, such as Florida, which has a constitutional prohibition against estate taxes. Thanks to the Connecticut death levy, a successful small business owner with a $10 million estate can save about $1 million by packing up and heading south.

What is it with these Northeastern Republicans? Don't they have any sense at all? This law will guarantee a Biblical exodus from Connecticut by anyone having a decent net worth.

Of course, Connecticut is not alone in driving out their residents. Here's another example:

In Washington state, Democratic Governor Christine Gregoire, riding high on her disputed 186-vote victory in last November's elections, linked arms with the Democrat-controlled legislature and overturned a ballot initiative approved by 67% of voters in 1981 that had outlawed a state estate tax. Now Washington imposes a 19% death tax, among the most onerous in the nation.

There has been a tide in recent years of Californians selling out and moving to lower cost states like Washington. This could cause a lot of folks to seek other opportunities.

These death tax changes are also effecting the electoral balance in the country:

Not surprisingly, it is generally the liberal, tax-and-spend blue states that are frantically reinstating punitive taxes on death. Will they ever learn? Over the past 20 years about 1,000 people every day have been fleeing these high tax blue states, for low tax red states. It's one reason the Northeast has suffered economically, and declined politically in terms of electoral votes.

In New York, about one in three tax dollars comes from those with earnings of $1 million or more. A rational policy out of Albany would be to lay down a red carpet to encourage more rich people to move in, or at least to stay there. Instead, with its 16% estate tax, Republican Governor George Pataki has effectively declared: "Invest anywhere but in New York." And that's why you can expect to see thousands of creative people from the Northeast whistling Dixie in the months and years ahead.

Here's a list of all the states which currently have death taxes, just in case you'd like to avoid being a resident when you pass from this earth:

Connecticut (blue)
Illinois (blue)
Maine (blue)
Maryland (blue)
Massachusetts (blue)
Minnesota (blue)
Nebraska (red)
New Jersey (blue)
New York (blue)
North Carolina (red)
Ohio (red)
Oklahoma (red)
Oregon (blue)
Pennsylvania (blue)
Rhode Island (blue)
Tennessee (red)
Vermont (blue)
Virginia (red)
Washington (blue)
Wisconsin (blue)

That's 14 blue states and 5 red states. Which way do you think the population, and the electoral votes, are going to shift?