Warm tropical beaches, stunning island views of the Pacific Ocean, near-perfect weather. Maryland doesn't have any of these things, so small wonder that Hawaii has the most millionaires per capita in the U.S., according to a recent survey.
Who is No. 2? It appears reports of widespread desertion by Maryland's rich are greatly overstated. The annual accounting by The Phoenix Affluent Marketing Service crowns Maryland runner-up for the prize.
For those keeping score at home, that's at least four years in a row that Maryland has held one of the top five spots in the country. The survey measures investable or liquid assets (excluding retirement plans and real estate) held. In Maryland, an estimated 6.8 percent of households, or nearly 145,000, have liquid assets of at least $1 million.
What's remarkable about this is that Maryland's position has been largely unaffected by the economic recession. Indeed, as the survey notes, the percentage of millionaires actually increased about a half-percent from last year.
That's a much more accurate — and far less gloomy — picture of the economy than the 30.5 percent decline of individuals reporting $1 million or more in annual income in their state income tax returns. And during the height of the stock market decline at that.
Nevertheless, that drop in 2008 income was reported by Comptroller Peter Franchot and others last year as a sign that Maryland's so-called millionaire's tax might be driving the rich away. But in reality, the modest (and temporary) increase of less than a percentage point on marginal income over $1 million a year approved by the state legislature in 2008 has not left all the mega-mansions from Ruxton to Potomac vacant and boarded up.
More likely, it was an indicator that the rich weren't selling assets, or at least not reporting capital gains (which are taxed as income in Maryland). A similar drop was reported in the 2001-02 recession.
This is important to note because certain gloom-and-doom critics would have voters believe that Maryland's economy is in a decline caused by high taxes and excessive regulation (and not merely declining as part of the national recession), when the reality is that many of the country's most prosperous states — including the top four per-capita millionaire states of Hawaii, Connecticut, New Jersey and Maryland — have similar business climates (if not climate climates). All have done well by attracting large concentrations of well-educated professionals.
Quality public schools and institutions of higher learning, a willingness to invest in roads, bridges, public transit and other infrastructure, enlightened views on environmental protection, public health and economic opportunity — these are the things that help attract and retain such a desirable workforce. The rich may be different from you or me, but they still like pleasant living.
That's not to suggest the presence of millionaires should drive economic policy in this state. But it's nice to know that all the local businesses selling Italian sports cars, gourmet food and wine, world cruises, designer clothes, hedge fund investments and seats on private jets still have a few potential customers left.