Bob Plain is the editor/publisher of Rhode Island's Future. Previously, he's worked as a reporter for several different news organizations both in Rhode Island and across the country.

20 responses to “Flight of the Earls Mythology Debunked”

  1. jgardner

    Let’s put the question another way then — do high tax rates attract wealthy people?
     
    I look at increasing local tax rates like increasing the minimum wage — increasing them doesn’t drive people out or increase unemployment, but it’s more likely the unseen happens. High tax rates dissuades affected people from moving in, and high minimum wages dissuades affected businesses from hiring.

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    1. RI Progressive

      I think “taxes” is one item on a very long list of things that are weighed in a person’s calculation.  And placing “taxes” on a pedestal, and ignoring everything else that makes a location a good place to live, really is a disservice.  

      Also, the same thing with minimum wage.  Paying an employee a decent salary per se isn’t the critical decision, but rather having demand for a business’s product.  Labor costs may have an impact on corporate profitability, but the main concern is market demand.

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  2. oslibrarian

    It seems to me that higher tax rates would be more likely to dissuade people with marginal incomes from moving to Rhode Island rather than wealthy people.  Wealth leads to all sorts of economical living outside of tax rates – better food, better health care, better living conditions – which in turn lowers expenses and increases the quality of life. 

    Wouldn’t the state of the State and the cities and towns and infrastructure holding it all together be more likely to dissuade wealthy people from moving to Rhode Island?  If the roads and bridges are crumbling, the schools are failing, crime goes up, and there is a general blight on the land – partly caused by inequitable tax rates – wouldn’t that dissuade more wealthy people?

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  3. Pat Crowley

    Great Post Bob.  This old canard seems to finally be dying the death it deserves.  I wonder what the Right will pivot to next? 

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    1. bob sims

       ” I wonder what the Right will pivot to next? ”
       
      The coming Greek-style collapse made inevitable from trillion dollar deficits?
       
      Kudos to you Pat for you’re great job representing your membership in the November pension debate.
      Under the stewardship of geniuses like you, Walsh and Lie-decker teachers have gone from free healhtcare, COLA’S and a retirement age of 50 to 20% copays, no COLA and 67 to retire.
      Yeah, your crew has sure earned their 6 figure salaries.

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  4. RightToWork

    This is really just a retread of the tired old Pat Crowley caricature of the conservative/libertarian argument. The caricature goes that rich people live in a location as some kind of mathematical calculation based on how much they will save in taxes and will move the moment they can save money in another state. This is clearly false and nobody on that side of the argument would likely disagree with that (hence a caricature).

    The *actual* argument being made on conservative blogs such as Anchor Rising is that taxes are one factor of many that significant amounts of people (not just “the rich”) do consider regarding where to live, and even more importantly the return they get for those taxes, which is very poor in Rhode Island. The claim that “nobody” considers such factors is demonstrably false, as a recent Ocean State Current opinion piece by Jennifer Hushion and the subsequent comments demonstrate. I can tell you right now that taxes were a factor in my decision to leave Rhode Island in 2010. And they were the largest factor when I decided to live in Virginia over DC and Maryland, which is a very real effect that wouldn’t be measurable in the progressive studies listed.

    What we do see very clearly in Census data is that people are largely choosing to live in places other than RI (it brings up the rear in population growth, and has been one of the few states to actually lose population in a couple of recent years). It also isn’t predominantly the rich who are leaving, as you point out, since they are better to absorb these costs. Rather it is the young professionals and middle class workers who rely the most heavily on things like infrastructure and public education which Rhode Island consistently fails in providing.

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    1. RI Progressive

      Many people are leaving RI because there are not very many opportunities for high-wage jobs.  Also, old people leave for better weather.  The tax rate may be on the list, but it’s not very high on the list.  I think that’s the point – not that taxes do NOT matter at all, just that they’re one of many issues, and not all that high on the list when compared to other things.

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  5. PinkHatLib

    “What we do see very clearly in Census data is that people are largely choosing to live in places other than RI (it brings up the rear in population growth, and has been one of the few states to actually lose population in a couple of recent years).”

    By the same logic being the 2nd densest state in the nation, people must love us second best! Airtight logic, that.

    The only thing shocking would be if dense, mostly urban states like RI were growing anywhere near the pace fo sparsely populated areas in the south or west.

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    1. RightToWork

      I don’t buy it. Even in the most densely populated states, there is still plenty of room for more people to move in. Housing scarcity is directly related to price, and there are places with far more expensive housing costs than Rhode Island that are still growing at a significant rate because there are more opportunities there. People are moving where the jobs are and where they feel like they are getting the most return for their investment. The census data shows that Rhode Island is at the bottom of the pack in these areas. And if you don’t believe that the statistics tell the whole story, I have gobs and gobs of anecdotal stories from recent movers that all say pretty much the same thing – Rhode Island is the worst deal around, it’s only getting worse, and there are better opportunities elsewhere. I honestly can’t think of anyone I know of besides a couple of hardcore progressive activists online who moved to Rhode Island recently thinking it was a great place to plan their future.

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  6. bob sims

    Guess I’m a mini-Earl.  Until they raised their tax I bought every TV, computer, piece of furniture and other expensive items over the border in Seekonk.
    I do know a few well-fattened government retirees who own cheap condos in Florida, go there for a month or so in the winter, and claim full time residence there-resulting in “zero” income taxes to RI. I’m sure those hated, dastardly rich can pull similar dodges.  You can raise the tax to 100% and not get a penny from the.
    Oh well progressives-back to raising taxes on luxury items like food, clothing and fuel.

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    1. Samuel G. Howard

      First, no one hates the rich. Tax cheats, yeah, I dislike them, but hatred isn’t the word I’d describe for them.

      Second, you’ve conflated sales tax with income tax. Sales tax or a value-added tax are things which progressives aren’t for more than conservatives or any others. See, the simple fact is that poor people have to buy things more often than rich people, because they can’t afford to buy the quality stuff and their stuff wears out faster. So any tax which taxes consumption like that is going to weigh more on the poor more than the rich; because it’ll effect the poor more often and because a greater proportion of their incomes will be eaten up by it.

      So the progressive alternative to raising sales taxes like Chafee wants is to raise income taxes on the well off, who utilize public services like anyone else and are more likely to leave if those public services get cut. But Rhode Island has a flat tax (instituted by Democrats), which is a regressive form of income tax.

      Also, the “Flight of the Earls” myth is that income tax increases cause the wealthy to pack up and leave. But that’s false. It’s not that sales taxes causes people to buy things from out-of-state. The Internet allows you to do that just fine. Unless Congress allows states to impose sales tax on Internet purchases, the sales tax is effectively 0% in any state for a large portion of purchases.

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      1. RightToWork

        “The Internet allows you to do that just fine. Unless Congress allows states to impose sales tax on Internet purchases, the sales tax is effectively 0% in any state for a large portion of purchases.”

        If you want to pay $3000 a year in shipping costs, then that would be true. 

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      2. bob sims

        “Also, the “Flight of the Earls” myth is that income tax increases cause the wealthy to pack up and leave. But that’s false”
         
        Come on.  You must be either 19 years old or a Brown educated economic illiterate.
        People stay up at nights scheming how to beat the bloated income, property  and inheritance taxes in states like RI, Illinois, NY, NJ, Ca, etc. Talk to anyone who does estate planning and grow up.

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    2. RI Progressive

      Bob,
      Does your buying stuff in Seekonk have anything to do with where you live?   Do you live in East Providence?  If so, then the logical place to buy stuff like what you mentioned is along Route 6 in Seekonk.  It doesn’t have anything to do with taxes, but with location.  The stores that service the northern part of East Bay are generally in Seekonk.

      I can’t imagine anyone living near Route 2 in Warwick driving up to Route 1 in Attleboro to save a 2% sales tax differential on an $800 TV.  

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  7. DogDiesel

    Samuel,
     
    Re-read your comment. Did you really mean all rich are tax cheats?
     
    Rhode Island shouldn’t be worried about the “Flight of the Earls” as much as the flight of the middle class. For the first time in my life, we are discussing leaving this state. We have friends that already left. My neighbor moved to Massachusetts because they don’t tax his postal worker pension. Another friend moved him, his wife, and his daughter and son-in-law to South Carolina. When he bought his car down there he couldn’t wait to call and tell me how little he paid in sales tax. The pull is there and you’re either choosing to ignore it or just plain blind. Moving expenses???…give me a break.

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    1. Samuel G. Howard

      I gave tax cheats as an example of someone I would dislike.

      But you’re right, the flight of the middle class is something we need to discuss. Because that’s a troubling thing, but it can’t all be solved via tax policy. Furthermore, for the people who are actually poor, moving simply isn’t an option, since it’s too expensive. There are $200 deposits on just about everything; electricity, the new apartment, etc. Plus that requires finding a new job. Plus the expense of moving. If you’re living from paycheck to paycheck, you simply don’t have that option.

      When services function properly and well, people are more likely to stick around, regardless of the tax. But if the services don’t work then why stay?

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  8. turbo

    It’s always a treat to see people advancing immigration and emigration as evidence of whether a place is doing well or badly.

    Even more so with growth. 

    The presumption here is that growth is good–but good for what? What’s the goal? What is growth meant to do?

    Growth is meant to improve standard of living. But growth alone doesn’t lead to an increased standard of living. For growth to improve standard of living, the benefits of growth must be captured by as many people as possible, otherwise the efforts you make to grow become more and more inefficient.

    What we have now is precisely that condition of inefficiency: the middle-classes have become more and more productive, in return for smaller and smaller gains. Very inefficient.

    That’s the big problem, this inefficiency, and yet here are the cargo cult capitalists trying to lure rich people to their landing pads in the hope that wealth will follow. Oh you primitives! Don’t you know it takes hard work  and careful planning to make a society wealthy, not shamanistic dances meant to seduce rich people into raining pennies from heaven? 

    You’ll grow up eventually, I guess, but only after a lot of embarrassing yourselves with supplications to the rich. 

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    1. RightToWork

      Somebody doesn’t understand what economic inefficiency means – how cute. These are some of the most confused statements on standard of living and productivity I have eve read.

      Which union do you work for, exactly? This is about the hundreth time I’ve seen these vacuous anti-capitalist, anti-rich union talking points posted here.

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      1. turbo

        You’re arguing no point. That’s one thing.

        The other thing is that I never used the word ‘union’.

        You may want to consider the possibility that you have an unhealthy obsession with unions–to the extent that you’re fulminating against them without making clear why.

        From all of your million posts here, it is impossible to distill even the weakest sense of what you want out of life. I mean, sure; it’s obvious you want unions out of the way, so that the middle class will disappear, so that you can have an aristocracy to cower before…but why? Why would anybody want that?

         

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  9. Rob

    I left. Taxes were absolutely part of it.  But the real driver was lack of value – high taxes combined with bad schools, terrible services, and non-stop corruption.  I don’t mind paying if I’m receiving value for my money.  I do mind if I’m getting ripped off.

    New state also has high taxes, but the state is run well and the schools are good.  We’re staying. 

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