Florida Sen. Rick Scott says his state is preparing welcome signs for Michigan’s wealthiest residents should voters here approve the so-called “millionaire’s tax” in next year’s balloting.
The Republican, a former two-term Florida governor, spoke Nov. 1 at the Macomb County Lincoln Day Dinner. He warned that Michigan will suffer and that his state will benefit if the additional 5% tax on those making more than $500,000 a year goes into effect. Pushed by a number of left-wing education groups, the measure seeks to raise additional revenue for public schools.
Before his speech, Scott spoke with Detroit News Editorial Page Editor Nolan Finley about the impact the tax will have on both his state and ours. What follows is a transcript of their conversation, edited for length and clarity.
Question: If the proposed additional tax on the rich makes the ballot and is approved, what should we expect?
Answer: It just means more people are gonna move out of your state. And what’s too bad is it’s the richest people who will leave. There was a book and a website, I don’t know if it’s still up, but I used it when I was governor. It’s called How Money Walks. It shows you that as taxes go up, people leave. You can track it by income. The wealthiest people more and more say, “What am I getting for all these taxes? I might get out of here.” And what they do, they take their money, they take their charitable dollars, they close their companies.
So all it does is hurt the poor kids, and I look at my job like this — I’m most focused on poor kids because I grew up in public housing and I watched my parents struggle. I watched my adopted dad lose his car to repossession. That’s a crappy life. And so that’s what’s gonna happen. You lose the people that are generating the jobs, generating opportunity.
Q: Is the impact only on the wealthy?
A: They never stop at the rich. So we’re running $2 trillion in federal deficits a year now, right? So what the Democrats always say is, “Let’s just tax the rich.” Just to balance this year’s budget, at what income level do you think it would take to pay off the deficit if we confiscate 100% of earnings? What do you think — $1 million, $10 million? It’s $100,000. So there’s never enough money.
Q: We already see a lot of our CEOs retire in Michigan. They may keep a home here, but they’re paying most of their taxes in Florida.
A: It’s not just their tax dollars, it’s their charitable dollars, too. They go to my church. And so we’re building a new church with their dollars. You go to Naples, Florida, during the snow season, which is like November 15 through, I’d say, April 1, you can go to a charitable fundraiser almost every night, on top of a political fundraiser almost every night. It’s all money made somewhere else. We have one of the nicest zoos, we have a nice botanical garden, we have nice museums, and all are paid for by people that move from other states and made their money someplace else.
Q: So why would you want to risk that gravy train for Florida?
A: I don’t think it’s good for poor kids, and it’s not good for our country. On top of that, we’re making our businesses less competitive. I’m a business guy. So I used to tell people, I never sold anything overseas and had people say, “I’ll pay you a little bit more because I know your taxes and fees are higher,” or “I’ll pay you a little bit more because you live in that state that has those ridiculous regulations.” I’m competing every day with people who don’t have the same costs. We’re killing American businesses and American opportunities. It might be bad for business, but it’s horrible for young kids that are trying to get ahead.
A: Where is the saturation point in terms of education funding? Michigan’s per-pupil foundation grant is now more than $10,000 a year. And yet student achievement isn’t improving. At what point is more money not the answer?
Q: Say the average classroom is 20 kids. Okay. So at $10,000 each, that’s $200,000. Where’s that money going? It’s going for overhead. It’s going for people that don’t even teach. It’s so frustrating. I’ve dealt with this when I was governor because we increased funding, but where did it go? It generally went to the superintendent’s office. They have more people there that are monitoring the teachers than are teaching. That’s why the only real solution is charter schools, because you’ve got to let the dollars follow the students. And so why is the charter school able to do a better job? Because we don’t have all the darn overhead. And they get less money.
Q: Is the higher education system any better?
A: Our higher education system is also messed up. They don’t care about whether you get a job or not. It’s all for the professors. And so I changed the reimbursement to generally reward three things: Do you get a job, how much money do you make, what did it cost to get a degree? Then they had an obligation to get these people out of school with a degree that could get them a job, a high-paying job. From a lot of surveys, Florida, in my years, became the number one state for higher education. And that’s all we did. I’d like to get rid of all the degrees where there’s no job. I don’t know why we confiscate somebody’s tax dollars and just give it to a university and have them go teach people and there’s no job at the end. Why would we do that? So I just started paying for the successes.
Q: Back to the millionaire’s tax. It’s a clever approach, isn’t it, because it’s easy to get people to raise taxes on someone else?
A: But it trickles down. It never stops. If you look at the federal income tax, it started with the temporary tax on the rich, and then that was enough. So then they had to do more, and then they had to do more, and then they had to do more. Number one is it’s never enough. Number two is it doesn’t impact the richest, because they can move. They probably have a second house already. It’s the poor that have a hard time moving.
Q: So basically, you think this tax will fill I-75 south with moving vans going from Michigan to Florida.
A: We generally have better weather, a lot better in the winter than you guys have. Do you just give people another reason to, instead of coming down here for two months or three months or four months, come down here for six-plus months and become a resident? The charitable dollars will move out of Michigan, the tax dollars will move out of Michigan and the jobs will move out of Michigan.
