Why do millionaires love Maryland?
With Annapolis discussing extending Maryland's millionaire income-tax surcharge, it's time to talk again about how much of a disincentive to capital the state's taxes are. Maryland's personal income taxes are high relative to its neighbors. And Smart Money says Maryland is the second worst place to die, after New Jersey, from an estate/inheritance-tax point of view.
Yet Phoenix Marketing International says Maryland is No. 2 in the country in millionaires per capita. And New Jersey (also with high income taxes) is No. 3. (This is a strict definition of millionaire. You have to have $1 million in liquid assets; under their definition that doesn't count your house or your 401(k) plan.)
why do millionaires love New Jersey? My answer: because it's really, really nice!
Especially if you are old. You don't have to live in New York or Philadelphia, and yet you have access to at least one of those cities, possibly both if you buy in Edison. You can have a splendid house in a nice, leafy neighborhood with reasonable public services, a socially excessive amount of parking, and good restaurants.
For smart young people, however, the nice parts of New Jersey are very much a net exporter.
That leaves Maryland. What are all these rich people doing here? How did they get here and why do they stay? Should we tax them more?