With Gerard Depardieu giving up his French passport to escape the French taxman, it’s fashionable for other rich folks to threaten to move to reduce their taxes. In the US, that consists of trying to play various states off each other, since the US taxes citizens on world wide income. The only way to escape is become a tax fugitive like Mark Rich and live in Switzerland and have people who are expert at moving your money around (I actually met one of them once, a man named Mikey. Oh and you have to read the link, the US attempted an extraordinary rendition of Rich in Switzerland sometime prior to 1992!).
The New York Times comes in on the side of the whining rich in a piece titled, “Two-Tax Rise Tests Wealthy in California.” It starts by depicting how hard pressed the wealthy are in California because they pay higher income taxes than in any other state in the US, and are also being hit by Federal “tax-the-rich” levies. Funny how there’s no mention of increased taxes on middle class folk, namely the increase in regressive payroll taxes and coming benefits cuts in Medicare and Social Security. Nor do we see a word of how many of the top rich are private equity or venture capital fund managers, and already organize their lives to have virtually all of their labor income subject to capital gains treatment. If the Times could be bothered to talk about effective income tax rates, as opposed to marginal tax rates, it would puncture the pretense that the rich are being abused.
It isn’t until paragraph 12 that we are finally told the thesis of the article is likely all wet:
Some of those earners seem at least resigned to the tax burden as a cost of being able to live in California rather than, say, Texas.
“I am happy to pay my taxes, whatever they are: no problem with me,” said David Geffen, the entertainment mogul, who owns estates on the oceanfront in Malibu and on the hedge-lined streets of Beverly Hills. He said he thought it could hurt the business climate, but added, “I don’t think anybody of means is really going to move because of it.”
Notice how the lead in misrepresents the quote? Geffen isn’t “resigned” which implies resentful; he is HAPPY to pay taxes, meaning he accepts them as the price of civilization and recognizes that he is rich enough that they don’t make a dent in his lifestyle. And he says even the resentful aren’t going anywhere.
The next bit confirms that the most the rich are likely to do is grouse:
Cristobal Young, an assistant professor of sociology with the Center on Poverty and Inequality at Stanford, conducted a study last fall that concluded that tax rates had little effect on where millionaires choose to live.
Mr. Young said he suspected that few, if any, millionaires would leave or stay away because of the tax increase. More likely, he said, they would find ways of reducing their tax burden, with loopholes or income avoidance, or simply reduce their work.
Reader DK provided a good shred:
What’s with journalists named ‘Adam’ … here’s a truly ridiculous NYTimes article by Adam Nagourney:
It’s a sort of People magazine piece: ZOMG! What are they doing to the wealthy now!! Isn’t it fun to watch how desperate tax grabs from the top 1% trigger musical chairs of moving out of high tax states, tax evasion, reducing work load and so forth. And, we can even quote economists about this!!
Oh, yes, we’ll make sure to have ‘balance’ in our story. “Some” people say that actually moving out of California is too severe an overreaction. But, they’ll never be able to prove it isn’t happening because, Adam tells us, these things are devilishly hard to track! (Good thing for Adam: never let any empiricism get in the way of a juicy story grounded in rumors!).
The entire article is of, by and for the wealthy. Not a word about whether/how raising taxes at the top affects the economy, affects investment, helps fund stabilizers such as government programs, jobs and safety net measures. No, none of that when you have a brilliant, proven Governor such as Rick Perry begging California millionaires to experience the liberty of Texas (and the “Adam-envying” sycophants at CNN trolling for first hand accounts of wealthy Americans put out and pissed off about these infringements on their ‘liberty’).
Really, one wonders just why Adam Nagourney is so happy being a court jester? Do he and Adam Davidson have matching costumes? Because clearly they are dancing to the same music and choreography.
Brace yourselves. We are only going to hear more kvetching from the rich for being asked to take a wee dose of the austerity medicine they are all too happy to force on the middle class and poor.