For example, referring to a recent Princeton study, the author’s said “Examining data from a 2008 Princeton study on the New Jersey tax hike on the wealthy, we found that there were 4,000 missing half-millionaires in New Jersey after that tax took effect.”

Sounds terrible right? But they neglected to tell readers the rest of the story. “We note that in spite of net out-migration, the number of half-millionaires in New Jersey has increased sharply in recent years, from 26,000 in 2002 to 44,000 in 2006 (a 70% increase). Income growth among high earners has led to a tremendous increase in the number of people who fall into the half-millionaire tax bracket. Using New Jersey tax records, we estimate that the new half-millionaire tax rate has generated an average of $895 million per year in tax revenues, rising from $739 million in 2004 to over $1 billion in 2006.” [Trends in New Jersey Migration: Housing, Employment, and Taxation, Policy Research Institute for the Region, September 2008, p.4]

It’s actually a very good study and completely discredits Laffer’s argument.

BTW – Your concern about over-taxing the wealthy doesn’t really stand the test. For example, we often hear about VT’s supposedly confiscatory 9.5% top marginal rate. But because of the structure of our brackets, those earning over $1 million paid on average only 5.3% of their AGI in VT state income taxes. Furthermore, the number of VT’ers earning more than $1 million doubled from 2003 to 2007 and their income tripled.

Sometimes the facts get in the way of ideology.