Some of the stuff of a potential conservative candidate for the presidency of the United States. Remember him facing down the public school teachers' unions and their bosses?
Currently, the Badger State loses $136M/year as residents are leaving Wisconsin for other states. As The Motley Monk has discussed in a previous post, the folks vote with their feet when it comes to state personal income taxes, leaving high-tax states (for example, California and New York) to relocate in low-tax states (like Florida and Texas). Wisconsin has pretty high property taxes (the 5th highest in the USA), although its sales tax (5%) is lower than the rates in its 4 bordering states. But, that's on top of its already high personal income tax.
Pamela Villareal has conducted an analysis of relocation trends, indicating that the 5 states to which most Badger State residents are moving. These include: Florida, Arizona, Texas, Colorado, and North Carolina. Using the NCPA's State Tax Calculator--which calculates lifetime gains or losses from moving from one state to another--and with a few exceptions, most Wisconsonites are economically better off leaving the Badger State and moving to one of those 5 low-tax states.
For example, consider how the folks calculate relocating and Florida--a state with no income tax--which is where the majority of Wisconsonites are moving.
- Florida's property tax rate is 0.97% (50% of Wisconsin's rate of 1.76%).
- A 25-year-old single renter with an annual income of $30k would gain $675/year in discretionary income, for a lifetime wealth gain of $75.3k+.
- A 50-year-old married couple with a home earning $100k annually would gain ~$3.1k/year in discretionary income, for a lifetime gain of ~$203k.
The "handwriting on the wall" is pretty clear for Governor Walker. If high-income earners in sufficient numbers figure out what Pamela Villarreal's study indicates the folks have already begun figuring out, his "miracle" will end up being depicted by his political enemies and the mainstream medias as a chimera. With income tax revenues falling short of expectations due to relocation, bond agencies will raise questions, and the Badger State's economic turnaround will end up being portrayed as a bust, just when Governor Walker should be peaking in his political stature.
Let the discussion begin...
To read Pamela Villarreal's study, click on the following link:
"Is the Tax Code Driving Taxpayers from Wisconsin?"