State Estate Taxes Still Hamper Economic Growth

by Adam Nicholson - No Comments
Posted on March 12th, 2010 4:56 pm

The New York Times reports that state estate taxes continue to wreak havoc in 20 states.

State governors in these 20 states may want to talk to the former treasurer from Connecticut.In 2008, the Connecticut Department of Revenue commissioned a study which found that Connecticut’s estate tax drove its wealthiest citizens out by the droves. In fact, it drove these citizens right into the open arms of states like Florida, which have no estate tax.

The study determined that wealthy citizens prefer to retire and die in states where they will be able to pass on the majority of their assets.

Connecticut is not the only state to learn this lesson the hard way.

Jay Hancock reports in the Baltimore Sun that Maryland has the same problem:

“Maryland has a complicated relationship with rich people. As one of the wealthiest states in the country, it cultivates more than its share. But they don't like to stick around once they've amassed a pile. At least they don't want to be taxed here.”

Connecticut and Maryland are just recent examples of an old lesson – when you tax something, you get less of it. And who wants less wealthy citizens investing in their state?

Some states are just slow at learning such basic lessons.

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