Millionaires Flee Montgomery County

Millonaire tax is causing the wealthy to move

By Michelle Tetu
|  Thursday, Feb 25, 2010  |  Updated 4:46 PM EDT
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Millionaires Flee Montgomery County

AP

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Millionaires are moving out of Montgomery County, and the "millionaire tax" is one reason why.

In 2008, the General Assembly raised taxes for millionaires from 5.5 percent to 6.25 percent. Now, the county is losing them to states with lower taxes.

Some wealthy residents who own homes in other states are establishing residency elsewhere, according to Montgomery County Executive Isiah Leggett.   

This is not doing much for the county's budget troubles. The flight of the wealthy has caused a sharp decline in taxable income.

Records show Montgomery County lost  more than $4 billion in taxable income for the 2007 and 2008 tax years.  The number of income tax returns above $1 million for that period were down almost 30 percent.

Next year's budget deficit will be more than $761 million, county officials estimate. Much of this shortfall is tied to a few residents who have either lost money in the economy, died or fled from the millionaire tax.

The millionaire tax expires this year, but the General Assembly is considering an extension.

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