southchild

How Not to Balance a Budget:

The “progressives” who dominate politics in these states target the rich on grounds that they have the ability to pay. They also have the ability to leave. From 1997-2006, New York State lost 409,000 people (not counting foreign immigrants). For every two people who move into the state, three flee. Maybe the problem for New York is merely bad weather, not high taxes.

Except that sunny California is experiencing a similar exodus. Over the past decade 1.32 million more native-born Americans left the Golden State than moved in — despite beaches, mountains and 70-degree weather. Mostly the people who have fled are the successful, the talented and the rich.

If taxes don’t matter, then maybe someone can explain the divergent economic paths of California and New York and America’s two other most populous states, Florida and Texas. The latter two states have no personal income tax. Personal income has been growing about 50% faster in Florida and Texas than in California and New York. (See chart.) This year Texas became the No. 1 state for Fortune 500 corporate headquarters. About a dozen of those 58 corporations once called New York or California home, and taxes are one reason they departed.

We realize that none of this will matter to the Sacramento and Albany politicians, whose only priority is taking ever more money from the private economy to feed their patronage interests. But perhaps it will serve as a lesson to other states that haven’t yet embarked on this tax-and-spend road to red ink and slower growth.

This entry was posted on Monday, September 15th, 2008 at 11:32 pm and is filed under business, General, politics. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.