Ed Driscoll

The Laffer Curve Laughs Last

In April of 2008, Nicole Gelinas of City Journal caught this vignette, when David Paterson replaced disgraced fellow Democrat, Elliot Spitzer, as governor of New York:

Paterson cited a number of personal friends, all former New Yorkers, who have contacted him from out of state since his ascent to the governorship. “A friend from primary school, Randy San Antonio, told me he moved to Dallas 20 years ago,” Paterson began. “Another friend, Randy Watts, had moved to Reno. A friend from Syracuse, Marvin Lee Simons, said he’s working in Lower Manhattan. I said we should get together . . . and he said, ‘Well, I don’t live in New York. I live in western Pennsylvania.’ Jeff and Stacey Stackhouse wanted to start a business on Long Island. They moved two years ago—they’re trying to start their business in Charlotte, North Carolina. They couldn’t pay the taxes here.”

One year later, Neil Cavuto of Fox News mentioned another prominent New York resident who was leaving the state, and Gov. Paterson’s response:

Rush Limbaugh to New York: “Drop dead. I’m leaving.” New York to Rush: “Don’t let the screen door hit you on the way out.”

And with that, New York Governor David Paterson laughed off a millionaire packing up and heading out. Paterson even found it funny.

“If I knew that would be the result,” he said of Rush’s leaving, “I would’ve thought about the taxes earlier.” Everyone laughed. Why?

Because this isn’t about a broadcaster named Rush, but a tax hiking rage for which politicians seem in such a rush. The governor is free to laugh off Rush bolting from a fancy Fifth Avenue penthouse condominium.

Clearly, the gov’s not a fan of Rush. But I suspect he is a fan of Rush’s money. He’s going to need it. And now he won’t have it. And if other rich guys join Rush, guys like Donald Trump….he won’t have a lot of it, or them.

Also in April of this year, as Newsmax noted, “Trump Furious Over New York Taxes:”

New York’s most famous billionaire, Donald Trump, is furious over his state’s proposed “millionaires’ tax.”

He hasn’t yet said he would leave the state, but he did place an angry phone call to New York Gov. David Paterson to complain about the plan to impose new taxes on residents earning more than $500,000 a year.

“It’s very dangerous, what’s going on in Albany,” Trump — host of the hit TV show “Celebrity Apprentice” — told New York Post columnist Linda Stasi after his call to Paterson.

“Rich people are going to leave this state. Why should they pay New York State taxes on money they made out of state?”

He added: “I told the governor, everyone is going to move to Palm Beach [Fla.], the nicest place in the world, where there is no income tax!”

Asked by Stasi if he would be leaving New York, Trump replied: “No comment. And you know what that means.”

Trump, of course, lives part-time at his world famous Mar-a-Lago mansion in Palm Beach, Florida, so finding new permanent digs in a state with no income tax would be easy.

And as Glenn Reynolds quips today, echoing Joseph Conrad before linking to Andy Soltis in the New York Post, “Mistah Galt, He Gone”:

New Yorkers are fleeing the state and city in alarming numbers — and costing a fortune in lost tax dollars, a new study shows.

More than 1.5 million state residents left for other parts of the United States from 2000 to 2008, according to the report from the Empire Center for New York State Policy. It was the biggest out-of-state migration in the country.

The vast majority of the migrants, 1.1 million, were former residents of New York City — meaning one out of seven city taxpayers moved out.

“The Empire State is being drained of an invaluable resource — people,” the report said.

What’s worse is that the families fleeing New York are being replaced by lower-income newcomers, who consequently pay less in taxes.

Overall, the ex-New Yorkers earn about 13 percent more than those who moved into the state, the study found.

And it should be no surprise that the city — and Manhattan in particular — suffered the biggest loss in terms of taxable income.

The average Manhattan taxpayer who left the state earned $93,264 a year. The average newcomer to Manhattan earned only $72,726.

That’s a difference of $20,538, the highest for any county in the state. Staten Island was second, with a $20,066 difference.

It all adds up to staggering loss in taxable income. During 2006-2007, the “migration flow” out of New York to other states amounted to a loss of $4.3 billion.

If only there were some solution to this problem — but what on earth could it be?!