Thursday, May 21

High Taxes = Happy People? (Yes and No)

This piece was in the news this week:
SANTA MONICA, Calif. (MarketWatch) -- Northern Europeans are the happiest people on the planet, according to a new survey.

The Organization for Economic Cooperation and Development says people in Denmark, Finland and the Netherlands are the most content with their lives. The three ranked first, second and third, respectively, in the OECD's rankings of "life satisfaction," or happiness.

There are myriad reasons, of course, for happiness: health, welfare, prosperity, leisure time, strong family, social connections and so on. But there is another common denominator among this group of happy people: taxes.

Northern Europeans pay some of the highest taxes in the world. Danes pay about two-thirds of their income in taxes. Why be so happy about that? It all comes down to what you get in return. - Marketwatch
Catch that last line, 'what they get back in return'. That is the catch. People in Scandinavia are 'happy' because their Government is taking money from others and giving them stuff. You can bet that the people paying the most are not happy, but of course they are in the minority, and many were probably not even included in the study, simply because they move out of these high tax countries. The UK is now seeing some of their richest declare that they are emigrating as the UK Government moves to raise their taxes from 40% to 50%, on top of other taxes that they already pay. (See here, here and here for examples.) I have a friend who was working in the UK until the credit crunch hit and his evaluation was that the country was bankrupt. He has since moved on.

This tax migration works for US States as well.
Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts. - Wall Street Journal
Maryland raised taxes last year on their richest and now they have lost a third of their million plus earning taxpayers. (Some of course just didn't make as much as the previous year, but others have surely moved on.) There is also the recent well publicized case of business executive Tom Golisano who will no longer be paying $13,000 in New York State income tax every day because he has moved to Florida.
Among other hikes in taxes and fees, they raised the marginal tax rate on the most successful (and most mobile) New Yorkers to 8.97 percent, the second-highest rate in the nation.

Bottom line? By domiciling in Florida, which has no personal-income tax, I will save $13,800 every day. That's a pretty strong incentive.

Like I said, I love New York. But I'm not going to pay any more for the waste, corruption and inefficiency that is New York state government. - NY Post
Maybe he didn't hear that paying all that tax is supposed to make him happy. As one of New York's biggest taxpayers, you would think that he would be the happiest. (Maybe he needs a copy of the report.) But no, it is the recipients of that $13,800 in tax money that he pays that are most happy.

Not for anything but taxes should either be flat or maybe even have a cap per person. Really, $13,000 in income taxes a day? What on earth is he getting back from the State of New York for that amount of money? Not much more than an invitation to pay more in taxes out of some idiotic claim of 'fairness'. If that is true, than it is only fair that everyone pay some taxes.

New York, California and a couple other greedy states look to well off people as cows to milk. Just one problem, there is no fence to keep these cows in their yard. Remember too that Rush Limbaugh also swore off working in New York. Even I, who is nowhere near being screwed like these guys on my taxes (but constantly fight to increase my income) will not move back to New York because I am not interested in seeing my tax money being wasted on Democrat fantasy windmills. It is bad enough that my Federal income taxes this last year took 20% of my gross earnings. That is one day out of five at work, just to pay off my Federal Income taxes. I then need to go back to work to earn for Social Security, unemployment, Medicare, etc all before I start earning to pay for my rent and living expenses.

Going back to the high tax countries named above: Denmark, Finland and the Netherlands. Funny how they also have some of the highest rates of alcoholism. Does that mean that there is a link between high taxes and alcoholism as well as to happiness? Maybe there is a link to the suicide rates as well given that this part of Europe has a high suicide rate? Also, perhaps the following story is also a contributing factor to Finland's high 'happiness' score: "Finns have highest job absenteeism in EU".

This whole report is a load of rubbish. As the saying goes 'money can't buy happiness'. If that is true, than Tax money can't as well. Otherwise they have been lying to us.
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