The Wall Street Journal notes that Connecticut’s governor is about to do much to increase the state’s coffers–the state of Florida, that is:
Florida Governor Jeb Bush ought to send his counterpart in Connecticut, Republican Jodi Rell, a thank-you note with a box of chocolates and a ribbon tied around it. Last month Ms. Rell marked her first anniversary as Governor by signing into law a tax bill that might as well be called the “Palm Beach Economic Development Act.”
The law requires that any resident of the Nutmeg State with an estate of more than $2 million pay a death tax of up to 16%–merely for the privilege of dying in Connecticut. The legislators in Hartford hope that the tax will raise $150 million in revenue each year–money that will come in only if the legislators in Hartford are also planning to build a Berlin Wall around the state.
Otherwise, expect a stampede of retirees and family businesses out of Connecticut into the many states without a death tax, such as Florida, which has a constitutional prohibition against estate taxes. Thanks to the Connecticut death levy, a successful small business owner with a $10 million estate can save about $1 million by packing up and heading south.
There are already thousands of high-income Connecticut residents with second homes in Florida or other warm-weather Southern states, so changing domiciles is easy and relatively costless. “The Connecticut legislature can’t seem to comprehend that it is taxing away the very wealth-producing people that this state is dependent upon for an economic revival,” says economist Dowd Muska of the state’s Yankee Institute think tank.
As the article notes, there are 19 other states with their own estate taxes. A recent addition to the roster has been Washington State, thanks to its newly elected governor:
In Washington state, Democratic Governor Christine Gregoire, riding high on her disputed 186-vote victory in last November’s elections, linked arms with the Democrat-controlled legislature and overturned a ballot initiative approved by 67% of voters in 1981 that had outlawed a state estate tax. Now Washington imposes a 19% death tax, among the most onerous in the nation.
Wow, and here I thought a plurality of three million votes wasn’t a mandate!