American Elephants

Why Do People Move? It Really Isn’t Mysterious! by The Elephant's Child
May 30, 2012, 10:04 pm
Filed under: Capitalism, Economy, Energy, Taxes

Why do people move? Packing up all your stuff and moving to a new location is not an easy task, and it’s not fun. Trust me, I’ve done it a lot. It’s one thing if you decide you can finally afford your dream house, and quite another when you downsize.

But think of the boundless courage that sent the Pilgrims across months of the North Atlantic in a leaky ship, or even the Puritans, a little later, in the Winthrop fleet. Taking all your earthly possessions and leaving everything you have known to strike out for the completely unknown is something else entirely.  Americans continued to up and move — across mountains, looking for better farmland. They pushed into what is now Tennessee and Pennsylvania. And consider those who embarked on wagon trains to cross an unknown Indian territory bound for an unknown Oregon.

Fast forward to today. California, the ‘Golden State’ has, in the last two decades, lost four million more people than have come to California from other places. Lots of reasons. High taxes, if you don’t own a big chunk of Google or Apple, your chance of owning a home in the Bay Area is close to nil. Environmental extremism, with a goofy cap-and-trade law resulting in skyrocketing energy costs drives out jobs and business. Jerry Brown believes that green jobs will replace vanishing industry.

New York’s high taxes have made the Empire State a place to flee. In the past ten years, it has suffered an exodus of some 3.4 million New Yorkers, nearly a million more people than those who escaped East Germany for West Germany or West Berlin from 1949 to 1961 — an exodus that led the Communists to construct the Berlin Wall in 1961.

The outflow hasn’t stopped. New York State’s income loss for the state is $45.6 billion, according to the Tax Foundation. There is still plenty of immigration from abroad. It’s not surprising that most refugees have headed for sunny, income-tax free Florida. New Yorkers who leave an estate of more than 1 million get hit with a state death tax reaching 16%.

Governor Andrew Cuomo admits the problem, but hasn’t threatened New York’s status as “tax capital of the nation” with any substantive reforms.

I don’t know why it is so hard to understand, but people who live in high tax states are moving to states with no income tax. States with high energy costs and high taxes are losing businesses to low tax states with reasonable regulation. Some of the folks who are moving are the hated rich, and they seem to be rich because they  run their businesses — which they are also moving — efficiently, and find it more profitable to do business in states where taxes are low, energy costs are low, and the states are preferably right-to-work.

Oddly enough, most of the states with a business-friendly climate seem to be run by Republican governors who go for balanced budgets and low taxes.  Must be a coincidence.

6 Comments so far
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Please allow me to compare California’s current tax policy and Governor Brown’s proposed tax increases against the policies of the other 49 states.

CHART: California Income Tax Brackets and Governor Brown’s Tax Hike Proposal Compared to the HIGHEST Marginal Tax Rate in the Other 49 States

CHART: California State Sales Tax Rates and Governor Brown’s Tax Hike Proposal Compared to the State Sales Tax Rate in the Other 49 States

Funny how only one state is tops in both categories. Despite ALREADY having high taxes, California seems incapable of living within its means. If California ALREADY has high taxes and is unable to balance its budget, is the problem that are taxes are too low? Or, is it a structural deficit where spending exceeds the capacity of the underlying economy?

Next question: Who is bankrolling Governor Brown’s tax hike initiative?

CHART: The Big Government and Union Special Interests Bankrolling Governor Brown’s Tax Hike

Strange how these same names also appear on the list of California’s biggest political spenders.

CHART: The 15 Biggest Spenders in California Politics


Comment by Soquel by the Creek

Pretty scary charts. Of course, the problem lies with the legislature, but Jerry Brown is no leader. Democrats in particular, but many Republicans as well, always assume that if you need more money, you just raise taxes, and the only consequence is that some people might get mad at you. But there are always consequences, usually unrecognized. Look at the national clamor for taxing the rich. (They can afford it!) But as Walter Wriston said, capital will go where it is wanted and stay where it is well treated. Wealthy French are arranging to move to Britain with the election of the new socialist President.


Comment by The Elephant's Child

The Elephant’s Child, I completely agree. You can see evidence of this in the California data as well.

California has the has the nation’s 3rd worst business tax climate

Chief Executive Magazine ranks California DEAD LAST for seven consecutive years as the worst state for business

Other surveys placed California as dead last on business climate since 2002

California ranks an ‘F’ on business friendliness by 6,000 small business people

California was ranked #46 for small business survival

People from other states are no longer coming to California

California lost income-producing population to low-tax states


Comment by Soquel by the Creek

That’s a powerful indictment. You must be a California resident. I lived the Bay Area, the East Bay, LA and environs, and was happy to leave for the Northwest. The people have to realize the state the state is in. Big job. I wish you well.


Comment by The Elephant's Child

As native New England resident, I left to pursue a business in Florida because I loved the climate and surroundings. The tax situation turned out to be a bonus. Either way, I’m a Floridian for the long haul.


Comment by Greg

I discovered through years of living in California that I need tall timber and mountains. A friend needs lots of open skies and the sunshine to grow zinnias. But economic misery can trump other things.


Comment by The Elephant's Child

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