As businesses and residents vote with their feet, low-tax states like Texas are winning.
Wealth and people are moving in America, from places where local policies inhibit economic growth to places where the tax and regulatory climate is sunnier.
The numbers are clear. Between 1995 and 2010 over $2 trillion in adjusted gross income moved between the states. That’s the equivalent of the GDP of California, the ninth largest GDP in the world. Some of the movement might be due to weather — that helps to explain some of Florida’s $86.4 billion gain and New York’s $58.6 billion loss. But we can attribute a great deal to the fact that capital flows to where it is best treated. Travis Brown, author of the new book How Money Walks, reports that the nine states without a personal income tax gained $146 billion in new wealth while the nine states with the highest income tax rates lost $107 billion.
States are now competing for wealth transfers like never before. In New Jersey, Governor Chris Christie used a recent Wall Street Journal forum to slam neighboring New York as going in the “wrong direction” and to urge residents of the Empire State to move to his home turf. “You see taxes being increased there,” Christie told the audience of CEOs. “You have a new mayor in New York who is aggressively talking about increasing taxes in New York City. While I feel badly for New Yorkers, come to New Jersey.”
Nor is Christie alone.
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See Also:
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#2 — Las Vegas Man Cheated IRS, Taxpayers Using False Home Buyer Credits