I’m Shocked to Find That People Move from High-Tax States to Low-Tax States

Well, not really. This post by the Tax Foundation notes that New Yorkers are finding other states, such as Florida, far less taxing and are relocating there. The story references the New York Post; that newspaper ran a story noting that $20 billion of income migrated south.

Foundation analyst Nick Kasprak said taxes play a role in people’s decisions to relocate.

“You generally see people moving from higher-tax states to lower-tax states,” he said. “Certainly, taxes are one way that states compete with one another.”

Now, you know that, I know that, but do the people running California know that? Back in December I posted about how California has lost $48 billion of AGI (Adjusted Gross Income) from 1993 to 2008. In total, the Bronze Golden State lost just over 720,000 tax returns while losing that income. However, at the same time, California’s population increased by 5 million.

The conclusion is obvious: High income individuals have left and were replaced by low income individuals. People like me left the state and have gone to less taxing environments.

Another conclusion is equally obvious: California must make fundamental reforms to its taxation system. This is going to be horribly painful (especially if you are in a public employee union). Both the number of employees, what they do, what they’re paid, and what their benefits are, must all be cut–and cut substantially. Even the most golden of climates can turn ugly.

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