Why are millionaires fleeing Maryland?
Reaction to Friday's column on how Maryland's estate tax increases the motivation for millionaires to get the heck out of the state.
From a millionaire who changed residence to lower-tax Virginia. He says the estate tax AND the recent income tax surcharge on high earners are pushing the well-off to leave Maryland.
The implication from one of the people you quoted is that people in my position would never ‘move’ for a 1 or 1.5% tax difference [the millionaire bracket for the income tax]. Are you kidding me? I grew up poor. A $32,000 tax difference is VERY real, even for someone in my position. That’s how much we saved in 2008, filing in Virginia and not in Maryland (besides the millionaires tax, base rates are lower here). The bottom line is that Maryland... lost more than $150,000 in [total] annual income taxes from my family alone that would not have been lost if it were not for the O’Malley administration’s confiscatory extra tax grab.
From another millionaire:
Having , in the last two years, acted as an executor for an estate where the deceased could have lived anywhere, I can heartily ratify what Lowell Herman had to say. In fact, I am faced with a residency decision myself. Merely changing residence to Delaware would save my family the maximum.
From Del. Susan W. Krebs:
Great column on the estate tax last week. I agree with you that the estate tax is what’s driving many of these millionaires out of Maryland.I have put in bills to fix the Maryland estate tax for the past five years, but they have never even gotten out of committee. This year, in an effort to at least get legislators on the record, I tried to amend my bill onto the inheritance tax bill for domestic partners. The amendment would have aligned the Maryland death tax with current federal law. As you can see by the roll call vote, my amendment failed.
UPDATE: And here is the other side of the coin: the rich folks who complain but don't do anything about it, as told by commenter Ruth.
Have listened to two well-off family members bemoan their lives in our state for years. They constantly insist 'they're not staying here' yet, here they are. Ta-Ta, the rest of us will soldier on in the Land of Pleasant Living. Don't let the door hit you on the way out.......
Comments
Have listened to two well-off family members bemoan their lives in our state for years. They constantly insist 'they're not staying here' yet, here they are. Ta-Ta, the rest of us will soldier on in the Land of Pleasant Living. Don't let the door hit you on the way out.......
Posted by: ruth | May 28, 2009 11:03 AM
If I worked hard to accumulate $1M of assets and could only pass on $970,000 after my death, I think my heirs would be pretty darn happy.
Posted by: Brian | May 28, 2009 11:16 AM
Brian, try your math again.
Posted by: CJ | May 28, 2009 3:02 PM
Are you kidding me? What a load of crap. Someone who makes a million a year and moved to Virginia because he has to pay an additional 32k in taxes is an idiot! If they do move, paying more in taxes isn't the reason. Why doesn't he/she move somewhere where they would pay even less in taxes? Life is more than what you make or pay in taxes, it's about friends and family. If money is all you care about, I'm glad you moved to Virginia. Tour kind isn't welcome in my great state of Maryland.
Posted by: Scott | May 28, 2009 8:49 PM
Brian, 16% of 1,000,000 is 160K.
Posted by: Jeff | May 29, 2009 7:43 AM
I stand by what Bob Ehrlich said about Maryland: it's worth the trouble.
This is our Home, too. Just because oone party rules the state with an iron fist and taxes and spends like a drunken sailor, doesn't mean that it's not our home.
I don't give up. Maryland is my home and it's worth staying here and fighting the good fight.
Posted by: bryanintimonium | May 29, 2009 8:20 AM
I moved to Delaware because of the Maryland taxes. I am not a millionaire by any stretch.
Posted by: Gail Beynon | May 29, 2009 11:14 AM
I'm with ruth and bryan. Residency decisions are so much more than just cost of living-if taxes are the best reason to live where you are, then you must not be living an interesting life. The estate tax argument makes more sense, since income taxes are temporary and marginal, but wealth can be passed on for generations.
My wife and I pay both Baltimore City property and income taxes, and we love it here. The people, the city, and the proximity to the ocean and mountains make the price well worth it.
Do we have a sense from the comptroller on the year-to-year filing changes due to recessionary/capital losses?
Posted by: Aaron | May 29, 2009 11:31 AM
I don't know what the big deal is. First off, tax of any kind is a burden that none of us should bare. I for one alleviate myself from this false responsibility by ensuring that my adjusted taxable annual income is always zero. As for the other millionaire Marylanders, I can't speak for them. As a citizen of Monte Carlo I only summer here. In my opinion moving to Virginia would only add stress to my peaceful existence. As for the poor, let them eat cake. I will never be a tax slave to anyone.
Ciao for now my sweet little fishies
Bruna Alvin
Posted by: Bruna | June 1, 2009 6:52 AM
Man, grass is always greener, isn't it. Those that would move out of state for tax purposes alone (except maybe moving for the purpose of eventually just dying...), you outta keep in mind that each jurisdiction gets its money one way or another. Delaware has it's own set of taxes to make up for no sales tax, they're just less visible. Virginia is the same way. You're just shifting from one tax to another, perhaps less visible, one. And perhaps that's one of the reasons why folks say Maryland is worth the trouble, all things considered. If you're moving just to die and have your estate taxed at a lower level so your heir can have more, I wish you well, and peace, and I hope your heirs don't suffer from an onerous inheritance tax wherever they may live.
Posted by: Shaker | June 1, 2009 11:52 AM
Here's another perspective... I am a consultant in Maryland (Eastern Shore). I used to live and work in the D.C. metro area, Northern Virginia, Rockville, and Bethesda areas. For those that know this area, you'll recognize the higher concentration of millionaires in these ares. Talbot County is also very wealthy, with many millionaires and billionaires. I serve many of these wealthy individuals as their business consultants. Most of them don't have lots of friends and family in Maryland. Most are older, and moved to Maryland a long time ago for business reasons and proximity to Washington. Many of these people have second and third homes elsewhere in the country, and when the greedy people in Annapolis couldn't manage their own money - they tried to take from "the rich" to make up for their shortcomings. I have personally assisted several of these million/billionaires during their move to other states. They didn't want to leave, but staying and allowing the tax rape to occur, would only enable it to happen again. I am not yet in this millionaire tax bracket, but I soon hope to be. If this type of behavior continues in Annapolis, I would consider moving to Virginia or Delaware as well. By the way, for people not familar with the area, you can drive from Maryland to Virginia to Delaware in just a few hours... they're small states.
Posted by: Tanner | August 12, 2009 9:36 PM