People and jobs are fleeing high-tax states and states with income taxes. Where are they going? States with lower taxes and no income taxes. This is a trend that started in the 1990s, and is reflected yet again in 2007,Â as 20,000 per day shifted around the country. And for lawmakers in Texas who think we can coast by on our old reputation as being “open for business,” they’d better think again — we have to fight to stay competitive.
According to the Wall Street Journal today, people are fleeing Michigan, North Dakota, New Jersey , New York and Illinois. (Heck, there’s a senator from Illinois who wants to get a job that includes public housing in DC, it’s so bad in his home state.)
Here’s how the WSJ editorial board puts things in perspective:
Politicians who think taxes don’t matter might want to explain the Dakotas. North Dakota ranked second worst in out-migration last year, while South Dakota ranked in the top 10 as a destination. The two are similar in most regards, with one large difference: North Dakota has an income tax and South Dakota doesn’t.
…Nevada was second among the states in new families — and a big percentage of the new arrivals are Californians. Nevada has no income tax. High income Californians can buy a house in Las Vegas for the amount of money they save in three or four years by not paying California income taxes.
…Our friends on the left say Americans are willing to pay more taxes to get better government services, but their migration patterns reveal the opposite.
Despite the rhetoric people might employ, folks instinctively know that ‘more taxes’ never results in ‘better government services’ — only in more government that costs ever more in taxes.
If Texas’ is to remain competitive (we’re currently in the top 12 of desitination states), we have to work furiously to eliminate bad policies (like the new gross margins tax), lower existing taxes (especially the property tax), and set in place rules that strictly limit the future growth of government at all levels.