Ehrlich column on taxes marred by sophistry, false comparisons

ColumnistRobert L. Ehrlich Jr.'s recent commentary on taxes supposedly provided a lesson in Economics 101 ("When taxes go up, taxpayers go elsewhere," July 1). Unfortunately, he told only part of the story.

His first example, concerning the supposed exodus of millionaires from Maryland, paraphrased data that first appeared in the Wall Street Journal. But he chose not to cite the very next sentence in that article: "No doubt the majority of that loss in millionaire filings results from the recession."

Also, his definition of millionaires is those who made $1 million or more in taxable income during the year, not the more widely used definition of people whose net worth is $1 million or more. Using net worth, according to Phoenix Marketing International, Maryland in 2011 ranked first in the percentage of households that are millionaires (157,779, or 7.2 percent of all households).

That represented a 9.05 percent increase in the number of millionaire households in Maryland over the previous year. Further, of the 10 states with the highest percentage of millionaires, between seven and nine of them are blue states, depending on the criteria used to assign political allegiance.

Mr. Ehrlich's second example emphasizes the increasing rate of businesses "abandoning" California. First, the numbers used were for businesses "divesting," a broader term that can mean leaving the state altogether, establishing divisions elsewhere or opting not to set up in California in the first place.

Mr. Ehrlich's discussions of the data also mentioned the recession and Joseph Vranich, who said businesses were divesting because "there is a feeling the state is not stable." But taxes were only a part of the overall discussion. And to put things into perspective, the 254 businesses described by Mr. Ehrlich as having abandoned California represent just .024 percent of small businesses in the state with employees, and a minuscule .0076 percent of all California small businesses.

Numbers need to be presented and interpreted in context. Mr. Ehrlich employs false correlations to imply causation and takes data out of context in an effort to bring readers around to his point of view. It is easy enough to do, but it doesn't truly help us understand today's complex problems, let alone solve them.

Kim C. Derrickson, Parkton

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