A State Cannot Achieve Prosperity by Taxing the Rich

Look at these numbers:

Almost half of California’s income taxes come from the top 1% of earners. In New York, the percentage is now 41%, up from 25% in 1994. In Connecticut and New Jersey, the top 1% pay more than 40%.

Being so dependent on super-rich people is great when times are good, because revenues soar. But the trouble is that the earnings of super-rich people are super-volatile, so when times are bad, or even mediocre, tax revenues plummet.

If governments approached budgeting the way smart people would, they would run massive surpluses in boom times, thus storing acorns for the inevitable winter ahead. But if our government officials have demonstrated anything over the years, it’s that they are utterly incapable of doing this. Instead, they look at the revenues in the boom times and think “WOW! We’re rich! We can spend every penny of that and more!”

States that insists on hammering the rich forget one important thing about rich people - they can move. Just look at all the people who've left New York because of the outrageous taxes (for instance, Rush Limbaugh).  Meanwhile, states with no or low income taxes are gaining people right and left.  Florida and Texas and doing quite well, thank you, and neither have state income taxes.  They make their money off the rich people when they buy huge mansion and expensive cars in their states.

Our tax system, both state and federal, is hopelessly tilted toward the upper income groups and at the federal level something like 45% of wage earners don't pay any income taxes at all.  People who have no financial stake in the government aren't going to bother to learn about the issues facing the country and will simply vote for whoever promises to keep them on the gravy train.

We've got to fix that.  Personally, I would favor some type of minimum income tax contribution percentage from every wage earner, even if it's only a few bucks.  Everybody benefits from government programs and agencies - and especially the military which protects us all - and everybody needs to contribute.