soak the rich?

In today's Wall Street Journal, there is an article (link is in item title) which should be required reading for all members of state legislatures everywhere. In the article, the authors report on the effect of individual states raising taxes on the wealthiest of their residents. These soak the rich policies are being advocated in many states as the perfect way to close the enormous budget deficits that have arisen. Not surprisingly, the article explains that the tax increases lead to flight of the wealthy from the states in question. This further leads to the loss of high paying jobs from these states and the diminution of growth in the economy. States with lower taxes draw in these new residents and the jobs and companies that they create with the result that these states greatly outperform the high tax states. simply put, if a state like Connecticut wants to hurt itself in the long run, one of the best ways to proceed is to raise the high end of the income tax.

We would all be better off if the budget deficits were closed by cutting expenditures rather than by raising taxes.