Not only is New York losing talented people to the rest of the country, then; it is also losing enormous financial resources at a time when it can least afford to.
Mr. Cox also details where the people in New York are migrating to, which includes:
- Florida
- New Jersey
- Pennsylvania
- North Carolina
- Georgia
- Connecticut
- Virginia
- South Carolina
- Maryland
- Texas
California has similar outmigration statistics (with more productive citizens leaving the state than going to it).
That's all fine. If people want to move to other states in the nation, they have every right to do so. When looking at the unemployment statistics, it is easy to understand why people are leaving some states (New York, California, Michigan, etc.) in greater numbers than those going to them.
That's what competition is all about. States, like Texas, have become "business friendly" to encourage more people to come to the state to work and to create new businesses. This, of course, irritates the Democratic-majority states, because it means that there will come a point where their onerous taxes and regulations cause a person to run to a state without those burdens. It also means that these states will be left with the whey and not curds of society.
States have the right (and some would include duty) to make their state attractive to their current residents and to future residents. They can do this in many ways, but the significant methods include low taxation, recognition of rights, and greater job opportunities in traditional employment and in starting new businesses. When a state puts in place onerous restrictions on starting a new business, or penalizes the self-employed/small business owner over the employed-by-others citizens, it is not surprising that entrepreneurs are going to respond to the carrots being offered in other states.
This is why the Left has been doing its darndest to level the playing field. Neo-Federalists attempt this by inventing Federal authority to regulate more and more areas at the Federal level.
The recent attempts to Federalize health insurance and health care is just one example. As more and more of the entitlement dollars are fed through the Federal coffers (rather than through State coffers as the Constitution clearly stipulates), the competition between the states for productive and entrepreneurial citizens is diminished.
The goal of Neo-Federalists is to make the states indistinguishable so that their ideas of entitlements and socialism are imposed on all states, making escape from these types of tax burdens moot. In other words, the Neo-Federalist goal is to homogenize America by intruding on the legislative authority of the individual states.
Some states have or have attempted to make laws to weigh outmigrants with the tax burdens of the state, long after they have left the state. New York, for example, wanted to make it a requirement that businesses who move out of the state have to continue to pay New York taxes for 10 years. The idea that a one state can impose taxation on a business or individual who establishes residency in another state is a kind of indentured servitude (and it is unconstitutional).
Unfortunately, the Federal government has done just that, by rejecting residency as the single condition of tax liability. For example, if a U.S. citizen leaves the country and establishes a business in another country, they are liable for U.S. taxes. They are liable for those taxes, regardless of country of residency. All other countries rely on residency rules for taxation, not citizenship. Further, if that citizen renounces their citizenship, taking citizenship of another country, they are still liable for U.S. taxes for a period of ten years. We are the only country to do that.
That type of tax liability discourages people from starting businesses in a particular state, or in the U.S. in general. We also have one of the highest corporate taxes in the world, discouraging foreigners (and citizens) from creating new businesses in the U.S.
We must compete with other states and with other countries for tax dollars based on incentives, not punitive measures, if we want to stop the John Galt effect and the exodus of productive and creative entrepreneurs from our nation. Each state has the right to legislate their tax code in any manner they choose. They also have the right to regulate commerce in their state, imposing onerous rule and requirements or to be "business friendly."
Today, U.S. citizens have the right to vote with their feet, as many in New York are doing in response to the onerous regulations and taxes in New York. We must do everything possible to keep it this way. Reversing the trend and schemes of Neo-Federalists would be even better, restoring the legislative and taxation authority to the states, but that will require a Republican-party super-majority in the Congress.
Cross posted at From the Maenianum Secundum (comments are open there).
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