By Kevin Meyer
A couple times a year I touch on the admittedly touchy subject of how tax policy literally attacks knowledge – and thereby revenue. It continues to boggle my mind that some people believe you can continue to increase taxes on the successful without suffering consequences. A story just the other day reinforced the oft-ignored reality.
New Yorkers are fleeing the state and city in alarming numbers — and costing a fortune in lost tax dollars, a new study shows. More than 1.5 million state residents left for other parts of the
United States from 2000 to 2008, according to the report from the
Empire Center for New York State Policy. It was the biggest
out-of-state migration in the country.
"The Empire State is being drained of an invaluable resource — people," the report said.
Bye bye knowledge. And what do knowledge workers have in common? They pay taxes. So…
It all adds up to staggering loss in taxable income. During 2006-2007,
the "migration flow" out of New York to other states amounted to a loss
of $4.3 billion.
New York isn't the only state hit hard.
High-tax California is experiencing the same refugee problem.
According to Census figures, from April 2000 through June 2008,
California lost a net 1.4 million people to domestic migration. The departees are not our welfare
kings and queens. They are the young, the educated, the productive, the
ambitious and the wealthy.
Where's everyone going? The low tax states like Florida and Georgia. Where are companies moving to take advantage of those pools of knowledge? You guessed it. Which states are then benefiting with more overall tax revenue even with lower tax rates? Yep, right again.
We've seen the effect between states. What will happen globally now that many countries, notably in eastern Europe, are lowering individual and corporate taxes while some of the developed world are raising them?
You may laugh at Laffer but Laffer may have the last laugh.