MN Budget Deficit

Keeping up on MN politics and taxes, the latest coming out of the state is a billion dollar projected deficit fresh off the heals of a veto override of a 6.6 billion transportation bill. Now I wouldn't want to be in the shoes of our legislatures but I hope they'd take note to what's happening in CA. California is one of the most gorgeous states and most desirable places to live in the country. However, because of the higher tax rate, the wealthy citizens are moving out and the wealthy contribute a larger percentage of the tax revenue. Now CA faces a 14 billion dollar deficit this year.

The source article states:

"When California faced a Mount Everest-sized $14 billion deficit in 2003, one of the major causes for the red ink was the stampede of millionaire households from the state," says a report called "Rich States, Poor States" by economists Arthur Laffer and Stephen Moore. "Out of the 25,000 or so seven-figure-income families, more than 5,000 left in the early 2000s, and the loss of their tax payments accounted for about half the budget hole."

Raising taxes seems like a logical solution to fixing the budget, but like CA, many of the wealthier citizens might take their tax money an move out.