
High-tax states are losing people, money and seats in Congress - ash
https://www.wsj.com/articles/blue-state-redistribution-11578443075
======
einpoklum
1\. No state in the US has politically powerful unions, public or private.
They're mostly in the employers' pockets and keep making concession after
concession. Not to mention being in the pocket of the democratic party, for
years already; and failing to participate in solidarity struggles by one union
for another; and essentially shutting down their own strikes despite the
members' sentiments, etc. etc.

2\. Very few data points, no trends over time, no examination of other causes
of population flows etc.

My conclusion: This is a pro-corporate propaganda piece: They want low/no
taxes and an even more maleable and precarious workforce.

Sounds like standard pro-corporate propaganda.

~~~
moomin
Indeed, if there’s such an exodus, why isn’t real estate in California cheap?

~~~
awb
The population can grow from kids bring born and growing up in CA.

If the housing supply doesn't match the internal population growth you can
have an exodus and an increase in housing prices.

------
js2
This opinion piece overstates its case. NC has a flat 5.25% income tax. Alaska
has no income tax. Yet NC is growing and Alaska shrinking. There’s a lot more
going on with where people choose to live than just tax rates.

The Economist did a special report last year comparing Texas and California,
looking at a lot more than just tax rates. They are the two largest states
facing many similar problems with very different approaches.

[https://www.economist.com/leaders/2019/06/20/texafornia-
drea...](https://www.economist.com/leaders/2019/06/20/texafornia-dreaming)

[https://www.economist.com/special-
report/2019/06/20/californ...](https://www.economist.com/special-
report/2019/06/20/california-and-texas-have-different-visions-for-americas-
future)

~~~
zaroth
What does NC have to do with it? In any case, income tax is just one part of
the total state tax burden, often overshadowed by property tax.

> _Over the last decade New York has lost more of its population to other
> states (7.2%) than any other save Alaska (8%), followed by Illinois (6.8%),
> Connecticut (5.6%) and New Jersey (5.5%)._

~~~
js2
The piece makes the argument that state income taxes are causing people to
leave. It used NC as an example of a state that’s growing. Yet NC has a state
income tax higher than some of the states that are shrinking.

Yes there are other taxes, but the piece focuses entirely on income tax. My
point is that there are many factors in where people choose to live, of which
cost of living is only a single factor, but this piece lazily focuses solely
on a single component of cost of living. It’s thus easy to invalidate its
argument that income taxes are what’s causing people to leave.

~~~
zaroth
TFA does not focus purely on _income_ taxes, but rather the overall tax
burden.

NC is ranked 26th in terms of overall tax burden. [1]

Rich people aren’t paying regular income tax rates as their primary tax
burden. They pay property, capital gains, and corporate tax rates.

I think NC is considered very good for corporate rates, and middle of the road
for personal, property, and capital gains rates. [2]

[1] - [https://wallethub.com/edu/states-with-highest-lowest-tax-
bur...](https://wallethub.com/edu/states-with-highest-lowest-tax-
burden/20494/)

[2] - [https://taxfoundation.org/publications/state-business-tax-
cl...](https://taxfoundation.org/publications/state-business-tax-climate-
index/)

------
getpolarized
Just moved from CA to CO. 7.25 to 4.6 ... Not a massive change mind you but
I'll take it.

The main problem with CA are the "hidden" taxes WRT quality of life. Real
estate prices being insane. Serious homeless problems in SF. Smoke from all
the fires. PG&E being evil, etc.

~~~
klipt
Ironically the high California real estate prices are partly due to low
(property) taxes from Prop 13. Much like low mortgage rates, they make real
estate more attractive as an investment and help inflate prices.

Texas has much higher property taxes but much more affordable housing. Which
runs counter to most people's ideas of red states always having lower taxes
than blue states.

~~~
foogazi
Austin median home price is around 400k and without prop 13

~~~
klipt
Is that supposed to be high? It's like a quarter of the Bay Area.

------
harikb
People who do these stats should see where the investment is for people who
left.

1\. Are they moving to Florida to take advantage of a tax shelter alone or
have they also sold off any NY/California real estate. That is, people move
for strategic reasons even if they believe in California/NY

2\. Young people vs Retirement - retiring to Florida is not a new thing.

3\. Wouldn’t you want old people to move away from high cost cities so young
can move in?

~~~
option
A lot of middle class families with kids move out. Bad public schools despite
huge taxes is not great for those raising their kids.

------
jandrewrogers
One of the most direct examples of this for the HN demographic is the
migration of tech workers from San Francisco to Seattle, which has similar
wages but no income taxes and no capital gains taxes. That saves tens of
thousands of dollars per year on income tax alone. It isn't a secret that of
the two big factors incentivizing people to move to Seattle from San
Francisco, one of them is the substantially reduced tax incidence (the other
factor being quality of life).

There is definitely a threshold where people start arbitraging tax differences
between States, though it doesn't happen often because demographic and
lifestyle preference dimensions also factor heavily. The partial de-
correlation between tax policy and predominant demographics/lifestyle in
recent years, combined with relentless tax increases in some jurisdictions,
has created an environment ripe for tax arbitrage.

~~~
crystaldev
As a non-vampire, I have to laugh at "quality of life." You can't use those
tax savings, or any amount of money for that matter, to buy a clear day in
January. Not to mention the wildly different personalities cultivated by each
climate.

~~~
existencebox
Please excuse what would otherwise be a glib comment, only writing this
because I peeked out my window (seattle) and got a good chuckle out of your
making this statement on the one day I can make this joke:

It's fine; we don't need money to buy a clear day in January, just for someone
on the internet to assert we don't have any for nature to go "Oh no they
didn't."

(full disclosure it is a little cloudy but the sun is definitely out, and it's
gorgeous.)

~~~
crystaldev
I'll try to assert that you don't have any sun more often then :)

------
seibelj
If you have a very small percent of your population pay an ever increasing
share of the tax burden, it’s quite easy for them to avoid it (move to
Florida). This problem has hit NY and Connecticut especially hard. Here is a
story from 2016 of how a single resident moving from New Jersey put the entire
state’s budget at risk [https://www.nytimes.com/2016/05/01/business/one-top-
taxpayer...](https://www.nytimes.com/2016/05/01/business/one-top-taxpayer-
moved-and-new-jersey-shuddered.html)

The truth is that if you want to dramatically increase taxes collected, you
need a broad-based tax that hits the middle class. But the middle class hates
taxes as much as everyone else! And therein lies the problem for politicians.
They can continue to bash the rich, but when push comes to shove soaking them
won’t solve the problem. Seizing all of Bill Gates money will only fund the
federal deficit (over $1 trillion this year alone) for a few months. And then
what to do?

One enormous, immoral handout to the middle class is the mortgage interest tax
deduction and the fixed-rate 30 year mortgage which are simply subsidized
handouts to people well-off enough to purchase property. People have come to
think this is a right, when in reality all taxpayers are handing over money to
those rich enough to purchase property. Only the USA has the fixed-rate
mortgage because it’s bad business for banks. Eliminating this would be a much
more economically logical way to increase the tax take than soaking the rich,
but I guarantee there is 0% chance of this happening because, again, no one
likes paying taxes!

~~~
cryptica
Taxes don't make sense in a fiat system where the government could just print
as much money as it needs anyway. Income tax hurts income earners, not asset
holders.

The system should not incentivize people to own more assets, it should
incentivize them to produce more value.

With the right regulatory framework and good separation of institutions, it
would be much more efficient for the government to just print the money it
needs directly.

I don't buy the argument that this would cause capital flight. The government
has many tools at their disposal to prevent that. It doesn't matter in the
long term if rich people dump all their stocks all at once and move overseas;
that would create significant opportunities for smaller local investors to
replace them because most of the value-producing companies are on the ground;
the infrastructure and the workers cannot be moved easily and that's where the
real value is.

~~~
tzs
> Taxes don't make sense in a fiat system where the government could just
> print as much money as it needs anyway

There was an interesting discussion of this is a book my income tax professor
in law school recommended to those who were interesting in the theoretical and
philosophical issues of tax systems.

The usual argument against the government printing money is that it causes
inflation.

Suppose, for example, you have a $1 000 000 000 000 in circulation. Each
dollar is worth 1/1 000 000 000 000 of the value of the total economy.

If the government prints, say, $52 631 578 947 dollars, there is then $1 052
631 578 947 in circulation, each dollar now worth 1/1 052 631 578 947 of the
total economy, and the government having 52 631 578 947 of those dollars,
giving the government 52 631 578 947/1 052 631 578 947 of the economy, or 5%
of economy.

In many ways this is very similar to a 5% flat tax, except there is no need
for taxpayers to file returns, no need for complex regulations about what is
or is not taxable income, and you can't evade it by keeping your transactions
off the record.

From an individual point of view, losing 5% of my purchasing power to
inflation isn't really worse than losing 5% of my purchasing power to
taxation.

Inflation has another problem, though. As the value of a dollar, as a percent
of the total economy, keeps going down, people need more and more of them to
get the same things. We'd have to be frequently changing prices, changing pay,
and changing everything else that is denoted in dollars.

That was probably a bigger problem in the past, and will be a smaller problem
in the future. As more and more transactions go entirely electronic, we could
probably internally do everything in some sort of pseudo-dollar that's pegged
to a fixed fraction of the total economy or something like that that the
electronic systems convert automatically to current dollars on the fly. So you
go to the store to buy bread, which the store internally priced using pseudo-
dollars, and the electronic price display tag under bread on the shelf
converts that 2020 dollars and displays that.

~~~
foogazi
> Inflation has another problem, though. As the value of a dollar, as a
> percent of the total economy, keeps going down, people need more and more of
> them to get the same things. We'd have to be frequently changing prices,
> changing pay, and changing everything else that is denoted in dollars.

don’t we already have inflation and deal with these problems anyway?

------
ykevinator
It's a little flimsy to ascribe causality in the headline

~~~
JumpCrisscross
Anecdotally, there is a link. SALT caps were the last straw for many high-
income former New Yorkers.

If you travel a lot for work and pleasure, it isn’t difficult to fall below
the residency thresholds. You’re still paying tax for the time spent in _e.g._
New York or California. But the other income can be shifted to a lower-tax
jurisdiction.

I’m staying in New York. But there is a limit at which the tradeoff is worth
it.

~~~
bradleyjg
> If you travel a lot for work and pleasure, it isn’t difficult to fall below
> the residency thresholds. You’re still paying tax for the time spent in e.g.
> New York or California. But the other income can be shifted to a lower-tax
> jurisdiction.

It's freeloading. Their lifestyles are possible because of high paying jobs in
cities that invest to create conditions where such jobs can exist at all.
(Same for the vaunted high paid remote workers.) They benefit from those
investments but do not wish to contribute. This kind of defect cycle
eventually leads to killing the goose that's laying the golden eggs.

~~~
JumpCrisscross
> _It 's freeloading_

Most of their productive lives are spent outside these cities. Once, they
gained from those cities. But no longer.

Today, the cities are bases for access to friends and leisure. The locals
create zero incentive for value producers, from before or today, to stay.

I say this as a proud New Yorker and Bay Area native.

~~~
bradleyjg
Maybe all your friends are in agriculture. Obviously I don't know. But most of
the productive and dynamic sectors of the US economy (including tech and
finance) could not exist without the network effects provided by our big, and
big spending, cities. The people that make a living directly or indirectly in
those sectors are benefiting from the investments made by New York and
California. If they choose to live in rural Montana or the Cayman Islands
while benefiting from the network effects provided by NYC and the Bay Area,
that's freeloading. If all the world were the rural Montana or the Cayman
Islands it would be a very poor world indeed.

------
throw0101a
In case of paywall:

* [https://archive.is/Mra7Q](https://archive.is/Mra7Q)

~~~
andreareina
Why am I getting served a cloudflare cert, and getting a 403 from
cloudflare[1]?

[1] [http://prntscr.com/qt3tl0](http://prntscr.com/qt3tl0)

~~~
dzmien
[https://community.cloudflare.com/t/archive-is-
error-1001/182...](https://community.cloudflare.com/t/archive-is-
error-1001/18227)

~~~
andreareina
I'm familiar with the disagreement, I used to get a DNS error not a 403. Looks
like things have escalated a bit:

    
    
        $ dig archive.is
    
        ; <<>> DiG 9.10.6 <<>> archive.is
    
        [-------->8--------]
    
        ;; ANSWER SECTION:
        archive.is.  299 IN A 94.16.117.236
    
        ;; Query time: 224 msec
        ;; SERVER: 8.8.8.8#53(8.8.8.8)
        ;; WHEN: Mon Jan 27 01:21:23 PST 2020
        ;; MSG SIZE  rcvd: 55
    
        $ dig archive.is @1.1
    
        ; <<>> DiG 9.10.6 <<>> archive.is @1.1
    
        [-------->8--------]
    
        ;; ANSWER SECTION:
        archive.is.  228 IN A 1.1.1.1
        archive.is.  228 IN A 1.0.0.1
    
        ;; Query time: 7 msec
        ;; SERVER: 1.0.0.1#53(1.0.0.1)
        ;; WHEN: Mon Jan 27 01:23:35 PST 2020
        ;; MSG SIZE  rcvd: 71

------
rayiner
Relevant: [https://www.chicagotribune.com/opinion/commentary/ct-
millenn...](https://www.chicagotribune.com/opinion/commentary/ct-millennials-
socialism-bernie-sanders-jobs-20160325-story.html)

> When tax rates are not explicit, millennials say they'd prefer larger
> government offering more services (54 percent) to smaller government
> offering fewer services (43 percent). However when larger government
> offering more services is described as requiring high taxes, support flips
> and 57 percent of millennials opt for smaller government with fewer services
> and low taxes, while 41 percent prefer large government.

------
microdrum
As they should be. California has perhaps gone as far as it can go, and one
wonders when the rubber band is going to snap back so that the place becomes
friendlier to workers and business.

