RDKirk wrote in post #12109238
Well, certainly, they can
afford to pay more. It's silly to argue that someone who makes several orders of magnitude more than the modal income can't afford
to pay any larger percentage of his income.
I don't think anyone is arguing that the weathly can't afford to pay more taxes. Certainly they can. The question is whether they should pay more just because they are wealthy. From a policy standpoint, I believe taxing the wealthy more disincentivizes work and productivity. Why work hard to earn more when you know the state is going to take a bigger and bigger portion of what you earn? This was on vivid display in the early 1960s when marginal tax rates were at 90%.
The debate of "fair" is, of course, the crux of the matter. Ultimately, it's not going to be "fair" that matters, but what actually works in the real world of politics and economics.
No, I think fairness should play a role. For example, is it fair to have one person pay 40% of their income, under color of law, to the state, and have another person pay nothing? What about shared sacrifice? A better policy would be that if you earn an income, you should pay some tax. We can quibble about how much, etc., but we should all have skin in the game. Using a standard like "what works" or "what's needed" is too ambiguous and is ripe for abuse.
These are the states with flat tax rates: Colorado (4.63 percent), Illinois (3.0 percent), Indiana (3.4 percent), Massachusetts (5.3 percent), Michigan (3.07 percent), and Pennsylvania (3.07 percent). Last year, Rhode Island and Utah adopted optional flat taxes of 5.5 and 5.35 percent, respectively.
None of those states is showing an influx of wealthy people, so where are they fleeing to? Moreover, all those states are either in the toilet economically or have an alternate means of support.
First, those data are from 2007 and are likely out of date. Secondly, the issue is not simply whether or not a state has a flat tax. The issue is (1) what the tax rate is, and (2) what other factors in the aggregate make that state desirable (or not) to live, work, and raise a family.
You wanted to know where people are fleeing? According to the 2010 Census Report issued two weeks ago by the Census Bureau, people are fleeing to the Rocky Mountain states, the south Atlantic states, and to Texas. These states showed the highest growth rates in the country. Why? In part it is due to the pro-growth public policies in these states. Some examples:
The eight states with no state income tax grew 18 percent in the last decade. The other states (including the District of Columbia) grew just 8 percent. The 22 states with right-to-work laws grew 15 percent in the last decade. The other states grew just 6 percent. The 16 states where collective bargaining with public employees is not required grew 15 percent in the last decade. The other states grew 7 percent. As these statistics demonstrate, public policies matter a lot when attracting people, industries, and capital.
The most rapid growth in 2000–10, 21 percent, was in the Rocky Mountain states and in Texas. The Rocky Mountain states tend to have low taxes, weak unions, and light regulation. Texas has no state income tax, no public-employee union bargaining, and light regulation. Moreover, Texas’s economy has diversified far beyond petroleum, with high-tech centers, major corporate headquarters, and new small businesses. It has attracted hundreds of thousands of Americans and immigrants, high-skill as well as low-skill. Its wide-open spaces made for low housing costs, which protected it against the housing bubble and bust that have slowed growth in Phoenix and Las Vegas.
We're getting off the photography topics, but you can extend the above principles to starting a new photography business or marketing your photos. If I were doing it, I'd move to Texas or another low tax state with a pro-growth policy. With lower taxes, I could offer less expensive goods and services to my customers and keep more of what I earn.