As the state government ponder how to deal with budget shortfalls, and a day before Californians vote on ballot propositions that will, among other things, ratify tax increases, it’s worth teaching an old lesson: High taxes drive people away. In the Wall Street Journal http://online.wsj.com/article/SB124260067214828295.html Arthur Laffer and Stephen Moore make the case persuasively. Let me add just a couple of illuminating data points. New York has long been a high tax state, with the nation’s highest state income tax rate (and in New York City the nation’s highest city income tax rate) for most of the last two generations. Texas is a low tax state with no state income tax and no city income taxes. How have they done?
In 1970 New York had 18 million people. In 2008 New York had 19 million people.
In 1970 Texas had 11 million people. In 2008 Texas had 24 million people.
Here are the numbers, with the 1970 Census populations, the 2008 Census estimated populations, the percentage of increase during the 48 period, and the percentage of the nation’s population in each state.
United States 203,211,926 304,059,724 49.6% 100.0% 100.0%
New York 18,236,967 19,490,297 6.9% 9.0% 6.4%
Texas 1 1,196,730 24,236,974 116.5% 5.5% 8.0%
Texas today has almost as large a share of the nation’s population as New York did in 1970. I think one of the most underreported stories of the last decade has been the story of Texas’s continued economic boom. While California has, for the first time since it was admitted to the Union in 1850, grown no faster than the national average, and New York continues to lag far, far behind national growth, Texas has been surging. In today’s recession its levels of unemployment and mortgage foreclosures are far below the national average. Texans have figured something out, and the rest of us might do well to learn what it is.
