Oregon Builds a Bridge to (become) California

Oregonians may think that they have solved their budget woes by passing new taxes on the "wealthy" and "corporations," but it is unlikely to help as much as they thought. Voters approved the measures by a fairly wide 54%-46% margin, which frankly surprised me. I thought they would be more thoughtful. Apparently no reads the news from other states. Here is an excerpt from a story in the Baltimore Sun about the Maryland "Millionaire's Tax":

A year ago, Maryland became one of the first states in the nation to create a higher tax bracket for millionaires as part of a broader package of maneuvers intended to help balance the state's finances and make the tax code more progressive.

But as the state comptroller's office sifts through this year's returns, it is finding that the number of Marylanders with more than $1 million in taxable income who filed by the end of April has fallen by one-third, to about 2,000. Taxes collected from those returns as of last month have declined by roughly $100 million.

Ultimately, Maryland gained almost nothing from the tax. Oregon's taxes hit at lower income thresholds, individuals that have less ability to move than in Maryland's case. From the NYT:

The state's top income tax of 9 percent rises to 10.8 percent on taxable income above $125,000 for single filers, $250,000 for joint filers, and to 11 percent for those with twice those amounts in taxable income.

Those marginal rates are comparable to California's even though in the reader comments one lefty tried to claim that Oregon's tax burden is among the lowest in the country. Tax burden isn't the whole story, even if true; the highest marginal tax rate is very important, as I have discussed previously. I also re-link to the relevant Cato study showing the connection between high state marginal tax rates and poor economic performance.

Maybe Washington (no income tax) and Idaho (7.8% top rate) can start luring away Oregon residents.