Driving home from this morning’s I-1077 kickoff, I listened to KUOW’s The Conversation, as the Washington Policy Center’s Paul Guppy raised a familiar trope in opposition to a high-earners income tax, arguing that many high-earners will simply pick up and leave:
“People with high incomes are very mobile, so it’s easy for them to change their residence, to move their income or change their tax status in someway, so I don’t think that the supporters would realize as much revenue from this tax as they expect.”
A reporter raised this issue to Bill Gates Sr., who brushed it aside by asking “Where do you go?”… the point being that 43 other states already levy an income tax, so it’s not like I-1077 puts Washington at such a competitive disadvantage. “You could go to Alaska, I guess,” Gates continued, but even that level of dismissiveness takes the question too seriously, for the entire critique is predicated on the bizarre notion that we shouldn’t levy a tax on rich people because a handful of them might go out of their way to avoid paying it.
Guppy’s argument also ignores the fact that one of the advantages of being wealthy is that it enables you to consume and enjoy the finer things in life. For example, nobody forces anybody to spend $50,000 on a Lexus when a $10,000 Hyundai can get you from point A to point B just as well; wealthy folks choose to purchase luxury cars because they can afford them, just like they choose to raise their families in Medina or Mercer Island over, say, White Center or Gold Bar.
Likewise, I don’t expect a family earning a million dollars a year to move to South Dakota to save $30,000 in annual taxes. I mean, what would be the point of being rich?
As Gates explains, Washington is “a great place to live.” And it’s the folks who can best afford to live here who are actually least likely to leave.