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Cum grano salis

Two blue states presently experiencing high-income-taxpayer flight are California and Vermont. Other high-tax states are experiencing upper-end property-taxpayer departures for similar reasons-Florida and New Jersey, for example-but, from the taxman's point of view, state governments don't care because the real estate always remains, albeit under new ownership.

The previous owner can't very well depart without first finding his replacement, presumably someone more compliant and willing than he to cough up his annual fair share.

Conversely, the exit of the high-income taxpayer leaves an unfilled monetary gap, as New York State and New York City have both learned when high marginal rate taxpayers have lost top-income-quintile jobs in the current downturn. They'll get a refresher lesson when the first tranche of the New York Stock Exchange departure for the exurbs, from lower Manhattan to Mahwah, N.J., the relocation of the rapid-trading hub, soon takes place, but that's another tale for another time.

Such flight is so patently unfair to state governments trying desperately to orchestrate just the equitable level of social justice via wealth-transfer from producers to consumers (with a little skimmed off the top for the orchestra-players and conductors, of course) that it oughtta be outlawed or at least regulated via an internal passport system.

So it was in the Soviet Union about which Progressive writer Lincoln Steffens wrote in 1921: "I have seen the future and it works."

But I propose only an eminently reasonable exit fee, primarily to discourage such anti-social behavior, but also for government to profit from it if it can't be dissuaded (kinda like the cig tax, doncha know).

For starters it could be applicable only to the highest income taxpayers, just like the new federal income tax in 1913 which initially applied a 7 percent rate only to the top 1 percent of wage-earners, but then it could quickly grow, as the income tax did, to a top marginal rate of 77 percent by 1918. Today, of course, the income tax is applicable to the top 55 percent, as an exit fee oughtta be. A year's worth of earnings, reflecting maybe 15 future years of lost-to-the-state taxable earnings at say 7 percent seems fair to me, as an objective observer.

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