Flight Happens: Don’t Play Robin Hood, Maryland

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The Fair Share for Maryland Act of 2024, Senate Bill 766, proposes several measures that would damage Maryland’s economy and quality of life. In a nutshell, the bill would make it more expensive to locate a business (large or small) in Maryland, and punish those who earn high incomes or realize capital gains here — or even simply die here rather than in a tax-friendly state. The presumption is that taking more from businesses and the rich will enable us to give more to those in need, via expansion of the earned income tax credit (EITC) and child tax credit. That presumption is false. Playing Robin Hood via politics and policy is increasingly popular, but it is a bad strategy at the state or local level. Had there been a sequel to the legend of Robin’s Merry Men, it would have dramatized how, after a short spell of robbing the rich as they passed through Sherwood Forest, the band fell on hard times as their prey simply avoided the area.

Facts and figures: The Tax Foundation’s latest report on tax climates for business places Maryland a dismal 45th, with a strong correlation between a state’s business tax climate and the movement of taxpayers. Nine of the 10 best tax climate states have had positive net domestic migration since the 2020 census; nine of the 10 lowest-ranked states have had out-migration. Maryland has lost almost 100,000 domestic out-migrants (net) since that census. The 10 worst tax climate states have seen out-migration of almost 2.6 million; the ten best have gained almost 1.4 million. Opportunity attracts, stagnation repels.

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