RUSH: It is a story from RealClearMarkets.com. It’s not ABC, CBS, NBC. None of that. I don’t know how widely disseminated this story is. But here’s the headline: “When Will Death-Spiral States Impose Taxes on Citizens Who Leave?”
It is a story that asks the question and then makes the case for it. Let me give you a couple of pull quotes. “Like Glenn Close rising from the bathtub to take one more stab in Fatal Attraction, don’t be surprised when death-spiral states resort to exit taxes as a last-ditch effort to forestall their impending bankruptcies. Exit taxes imposed on emigrants have a long history, including their use in both Nazi Germany and the Soviet Union,” and naturally they would in places like that.
Exit taxes “were imposed under the theory that, since citizens were educated by the government and were either provided benefits or allowed to profit from jobs and business held while living under the government’s protection, they were obligated to pay back some of that money on their way out” of the state. This sounds like Elizabeth Warren. You didn’t build that. Your business is only successful because the state government made it possible.
The state government protected you. The state government had regulations for you. The state government built roads and bridges for you. You just can’t up and move — and if you do, we’re gonna continue to collect taxes from you as though you still live here. Folks, I hadn’t considered this. But now that I’ve seen it, I think we could all safely assume this is going to happen. I get audited every year by the state of New York, and I left in 1997!
The state of New York is essentially already charging exit taxes, just not on this premise. They claim that I’m there certain number of days a year when I don’t go there anymore. And I have to prove it every year 14 different ways for the number of days they allege that I’m there. I report, “I haven’t worked there this year.” They say, “Prove it 14 different ways for 365 days.” The latest audit has been going on nine months, for a year I was never in New York.
This happens to everybody that leaves New York, particularly for a state that has no income tax like Texas or Florida or Kentucky. So the premise here is that if you decide you’re gonna leave California (and thousands of people a day are) for Idaho or any other low-tax or no-income tax state, the state you’re fleeing can still charge you exit taxes because you benefited from that state government when you lived there.
Now, what does this mean?
What is abundantly clear now is that our government, federal and state, no longer exist for the people. The reality now is the people exist for the government. Whether you like it that way or not is not the point. The point is the Rubicon has now been crossed. We all work in service to the government at all levels. That’s how government sees it. That’s how the president sees it; that’s how senators see it. That’s how state legislators see it and governors see it.
Our income is not ours. Our property is not ours. Our work isn’t ours. The government has first claim to all of it — whether in the form of income, real property, guns, whatever. The government now claims the authority to both dictate and ban — and there seem to be no avenues to stop this, and there’s no opposition to it. The Republicans in Washington are rallying around failure at this point. Obama equals failure. The Republicans are rallying around it.
Now Republicans all across the country are even talking like the Democrats. “We must have a balanced approach. We must tax the rich. We must penalize those people who haven’t paid their fair share. We must go get additional ‘revenue’ from those who have more than they need.” Republicans and Democrats alike are now using this language, and what the language means is that our income isn’t ours, our property isn’t ours.
We exist for the government.
The government no longer exists for us.
It’s the other way around.
There is virtually no serious, substantive, effective political opposition to any of this now. That’s the transformative nature of Obama that I was talking about in the first hour. That is the real transformation taking place right now in this country. No longer does the government, federal or state, exist for us. “We, the people” is out the window. “Elect people who serve at our pleasure” is out the window.
We work for their pleasure.
We exist for the government.
Whenever you hear Obama speak about practically anything, but particularly on the fiscal cliff or the next budget deal or the debt limit deal, whatever. You listen to him and it’s clear that the government is the sun and every one of us are planets orbiting around it. We work in service to the government at all levels. They have first claim on everything. All money is government’s, and what we end up with is what they decide to permit us to end up with.
We don’t earn anything.
“We didn’t build that.” They did.
They permit us — because of their benevolence, good graces, or whatever — to have whatever it is we have. And the more supportive we are of the government, the better we will be treated. If we oppose the government, we will be targeted, and we will be said to be the problem, or the enemy. But here you have now this tax idea. It’s out there now. States imposing taxes on fleeing citizens. Exit taxes.
“One of the most fascinating characteristics of government borrowing — whether at the local, state, or federal level — is that debts contracted over time are obligations tied to specific geographical boundaries but not to the citizens living there when those debts were incurred. For example, while it’s customary to say that each of the 210,000 residents of Stockton, California, are on the hook for their share of the bankrupt municipality’s estimated $700 million in unpaid bills, the day one of them picks up and moves, personal responsibility for that debt drops to zero.”
If Stockton, California, is at $700 million in debt and you’re a resident, part of that’s yours. If you leave, it’s no longer your problem. That is now called tax evasion, in this story. Leaving New York… By the way, think of all the calls we’ve had on this program with people accusing me of being unpatriotic for leaving New York.
“If you left simply because you didn’t want to pay taxes, you aren’t being patriotic.”
I said, “I thought I’m being smart. I thought I’m maneuvering things here to keep more of what I earned.”
“No. No. You owe that! It’s patriotic.”
Biden said patriotism equals paying taxes.
So now, ladies and gentlemen, leaving — moving out of — a state for whatever reason, a high-tax state or a state that’s in a death spiral where finances are in a mess? You moving out? That’s now tax evasion. And this article I have here says, “Imagine if that type of tax ‘evasion’ were eliminated. How would it change America? Government debts are accrued on your behalf by elected officials for whom you had a chance to vote, all supposedly representing your interests.
“In a democracy, all citizens are obliged to pay the government’s bills as determined by the duly empowered taxing authorities — regardless of whether they voted for a particular officeholder or not. What’s to stop legislators from passing laws that make debt obligations due and payable by any citizen who decides to leave for another jurisdiction? After all, they don’t hesitate to take your money when you die.”
Why should they not take your money when you leave?
If you have death taxes and income taxes, why not an exit tax?
“Mayors and governors of most tax-and-spend, heavily unionized, low-growth cities and states are both desperate for revenue and tired of watching disgruntled citizens vote with their feet,” leave. “Think how politically attractive it would be for them to make ‘economic deserters’ pay their ‘fair share’ of old debts” even after they leave. “I can see the arguments already: ‘You can’t move away from credit card debt or commercial debt, so why should government debt be so easy to dodge?’
“Politicians could easily win kudos from both public employee unions and the overtaxed residents left behind, for the mere cost of enraging emigrants who won’t be around to exact retribution at the next election.” That’s “emigrants” with an “E,” as in leaving. “Like Glenn Close rising from the bathtub to take one more stab in Fatal Attraction, don’t be surprised when death-spiral states resort to exit taxes as a last-ditch effort to forestall their impending bankruptcies.”
Again: “Exit taxes imposed on [people fleeing] have a long history, including their use in both Nazi Germany and the Soviet Union. … So what is to stop, say, California from imposing exit taxes on the steady stream of citizens heading off for Texas, Arizona, and Nevada? More than 200,000 people flee [California] every year, taking their money with them while leaving behind their share of the state’s $617 billion in state debt, which comes to about $16,000 per resident.
“That’s $3.2 billion a year in tax evasion!” if you leave. This guy’s point is: They’re gonna figure this out pretty soon, and they’re gonna start charging exit taxes. And I wouldn’t put it past them. But this whole notion — you didn’t build that, your money isn’t yours, your income isn’t yours, your property isn’t yours, your work is not yours, government has first claim to it — not only is that the prevailing attitude among government people now, but way too many citizens agree with that premise as well.