When times are tight, people look for potential savings wherever they can. Increasingly, Marylanders living under the oppressive tax regime of Gov. Martin F. O'Malley have realized they can get a better deal by packing their bags and heading for the Old Dominion.
That's a fact backed up by hard numbers the pro-business group Change Maryland harnessed from Internal Revenue Service (IRS) data. According to the group's calculation, a total of 31,000 residents abandoned Maryland between 2007 and 2010. About a third of these chose to move to the commonwealth, bringing with them $390 million in taxable income.
The amount of money these families were sending to Annapolis played a significant role in their choice of where to live. "Since 2007, Maryland has raised taxes and fees 24 times, taking an additional $2.4 billion out of the economy each year," said Change Maryland Chairman Larry Hogan. "Clearly this is not working. Politicians
can whine about a tough economy and making due with less, or they can choose to do more with more. Tax flight is public enemy number one."
According to the Tax Foundation, the revenue-raising binge that Mr. O'Malley began after taking office in 2007 sent the state's "tax climate ranking" plunging from 24th to 45th place nationally. In the region, only New Jersey earned a worse rating for its attitude toward business.
The IRS figures on tax flight are so detailed that one can look at county-by-county performance in each state. In the most demographically similar Washington suburbs, a net 2,029 people moved out of Montgomery County and into Fairfax County. Since both areas share proximity to federal government jobs, the shift toward Virginia suggests a distinct preference for lower taxes. That's good news for the commonwealth, considering Montgomery County escapees came with $86 million in annual earnings.
"People vote with their feet, and the fact is, they're increasingly voting for Virginia's commitment to low taxes, limited regulation, great schools and efficient government," said Gov. Bob McDonnell's spokesman, Jeff Caldwell.
Last month, the U.S. Chamber of Commerce declared Virginia the "most livable state" in its ranking of the business climate in each of the fifty states. Forget the tired class warfare rhetoric. Friendliness to business isn't about appealing to "fat cats," it's about ensuring that entrepreneurs can do what they do best. The benefit for the little guy is clear. Virginia's unemployment rate is 5.5 percent while Maryland's is 6.7 percent. Mr. O'Malley's policies have only stimulated his state's moving van industry.
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