This discussion is relevant these days as it looks like Congress is about to pass legislation that will reduce individual and business tax rates. Given our experience and writings, this is great news for the economy and individual freedoms. People and businesses will get to keep more of their own wealth, and as you will see below as we review past discussion on this topic and introduce a new set of data from the National Review, that is always a good thing.
1) Before we review the latest data proving our theory, feel free to visit just a small sample of previous posts we have done that prove high taxes and extensive regulations are so negatively correlated with economic growth and vitality:
http://loathemygovernment.blogspot.com/2012/07/state-level-economic-musings-california.html
2) Next, take a look at the following report we did earlier this year where we showed that while higher taxed and over regulated states tend to vote for Democrats, in the long run their excessive taxation and regulation drive people away from their states, resulting in not only a population drain but also an economic and tax revenue drain. As more and more people leave a state because of over taxation, the tax base gets smaller which cause state politicians to raise taxes to make up for the shortfall which drives more citizens out of the state which reduces tax revenue and at that point the tax base death spiral is in full swing:
2) Next, take a look at the following report we did earlier this year where we showed that while higher taxed and over regulated states tend to vote for Democrats, in the long run their excessive taxation and regulation drive people away from their states, resulting in not only a population drain but also an economic and tax revenue drain. As more and more people leave a state because of over taxation, the tax base gets smaller which cause state politicians to raise taxes to make up for the shortfall which drives more citizens out of the state which reduces tax revenue and at that point the tax base death spiral is in full swing:
"Benny Johnson, Jason Howerton, and Parker Lee, writing for the Independent Journal Review recently summarized what the economic conditions currently are in the states that heavily voted in favor of Democratic Presidential candidate Hillary Clinton in last month’s Presidential election. Besides having the common characteristic of favoring Hillary over Trump, they also have the common characteristic of having some pretty lousy economic and out migration trends going on in their states. This conclusion is based on citing a Washington Times article by Stephen Moore.
Moore concludes from his analysis that the out migration from these Hillary strongholds is driven primarily by economic reasons including: “high tax rates; high welfare benefits; heavy regulation; environmental extremism; high minimum wages.” Amazingly, the ten states that Hillary Clinton won by the largest percentage margins saw a net loss in population from 2004 through 2014. California and New York by themselves saw a net loss of 2.75 million Americans over that ten year time frame."
As you go through the ten states economic profiles below, keep in mind that these states are almost always dominated by Democrats in elected office. Yes, occasionally, a Republican or two might get elected in these states, but for the most part these are strictly Democratic controlled and operated states. I am not saying there is a cause and effect of Democrats creating lousy economic conditions but the correlation, as you will see below is certainly quite strong."
1) Massachusetts - Between 2004 and 2014, Massachusetts lost 156,861 more residents than it gained. One reason for such a loss is that Massachusetts has a top business income tax of 8%, one of the highest overall property tax burdens in the country, and also has estate and inheritance taxes.
2) California - California has lost an amazing 1.3 net residents over the past decade despite having some of the richest people in the nation living in the state in Hollywood and Silicon Valley. Thus, something must not be right for the over 1 million people who decided to leave the state for a better life
3) Maryland - Maryland has lost a net 145,000 residents over the past decade, possibly caused by the reality that the state ranks 44th in economic outlook according to the in-depth analysis done by the American Legislative Exchange Council (ALEC), has a top personal income tax rate of 8.95%, and has the 13th highest business income tax rate. Over the past 47 years the state has had only two Republican governors.
4) New York - The ALEC ranks New York as dead last in its economic outlook ratings, a spot it has been “honored” with in six of the past seven years. It has some of the highest tax rates in the country and its net loss of population over the past ten years, 1.5 million people, is the largest loss of any other state in the union.
5) Rhode Island - The ALEC rates this state as 48th in economic performance and 35th in economic outlook. Rhode Island has a very high property tax rate and has had a net loss of 70,000 residents over the past decade, a lot considering how small the state’s population is to begin with.
6) New Jersey - My former home state has some of the highest tax rates, personal income tax, property tax, and business tax rates, in the country. The ALEC ranks the state as 48th relative to economic outlook and has had a net loss of about half a million residents since 2005.
7) Connecticut - Higher than average tax rates and ranking 47th on ALEC’s economic outlook measure makes it no surprise this state has lost 153,000 residents in total over the past decade.
8) Vermont - The ALEC has Vermont ranked 49th in economic outlook, the state has the second highest personal income tax structure and has enacted many new tax changes that will make it more expensive to live in the state. No surprise, it has had a net loss of 9,000 residents over the past ten years.
9) Illinois - Possibly one of the biggest basket cases of all the states, given its incredibly high unfunded pension and retiree benefit liabilities for government workers, the state does have a reasonable income tax rate but higher than average business tax rates and high property taxes. As a result, it has had a net loss of 700,000 residents over the past ten years.
10) Hawaii - The ALEC found that Hawaii has the highest marginal personal income tax rates in the country and the highest sales tax rates in the country. Despite its beautiful weather, the state had a net loss of 36,000 residents since 2005.”
The complete post can be read at:
3) Let’s now get down to the latest data that proves my point, based on a December 15, 2017 article by Jim Pettit, writing for the National Review website:
- Apparently, Americans in great numbers are moving from states with high taxation and intrusive governments to states with limited government and lower taxes.
- And this hypothesis holds up despite some liberals trying to tie the out migration from high tax states to climate, retiring Baby Boomers, and other non-economic factors.
- This latest analysis comes from a recent IRS study of the latest tax and migration numbers and trends from 2015 and 2016.
- The IRS study found that Florida, a state with no income tax and lower property taxes, saw an increase of a a staggering $17.4 billion in adjusted gross incomes in the state because of in migration.
- And this increase in adjusted gross income and migration was not because a bunch of old people were retiring to Florida since the IRS numbers show that the biggest influx of new Florida residents, 70,000 people, were between the ages of 26 and 35.
- This was 10,000 more than the over 55 age group.
- South Carolina, a much smaller state, had the second highest adjusted gross income increase, $2.3 billion.
- Not surprisingly, based on the above analyses we discussed, the states that lost the most were high taxation states Connecticut ($2.7 billion) and New York, ($8.8 billion).
- Again, not surprisingly, according to the Tax Foundation, New York has the highest total tax burden in the country while Florida has the fourth lightest tax burden.
- In addition, California has the highest so-called impact fees, taxes that are collected to fund schools, libraries, and infrastructure at $31,000 per household while Texas has the lowest at $4,000.
- Thus, it is not a surprise that California loses more homeowners and citizens to Texas than any other state.
Again, no matter what set of numbers you look at, the IRS, Tax Foundation, etc., the answer is always the same: people will always look to minimize their tax expense and burden, increasing their personal freedom in the process. And most often the process is a migration from places where taxes and regulations are high to places where taxes and government regulations are low, both factors of which increase personal freedom.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w
No comments:
Post a Comment