State governments are finding this out, because their income tax revenues dropped like a rock in April:
Personal income tax revenues in April were 15.8 percent, or $7.9 billion, below the same month in 2013, according to preliminary estimates from Rockefeller, a public policy research group at the State University of New York. April is a key tax collection month because of the federal tax filing deadline.
From January through April income tax collections fell 7.1 percent from the same period in 2013, Rockefeller found. Out of the 38 states for which data is available 33 registered declines. Altogether 41 states collect personal income taxes.
As usual, there is a reason why:
At the end of 2012 taxpayers had reacted to impending changes in the federal tax code by selling off investments or otherwise “accelerating” their income to take advantage of lower levies. That boosted personal income tax collections for states last year, but the bulge ended this year.
No one likes to pay taxes. And when they are given a choice, people will order their affairs so that the taxman takes the smallest bite possible.