Correct! They are 4 of the 9 states that don't have a personal income tax.
But, they also have something else in common because "citizens vote with their feet." From 1989 to 2005, those 4 states were the top 10 states gaining population, as residents migrated from high-personal income tax states to low- and no- personal income tax states.
Now, what's that mean for the folks remaining behind in those 4 states? Or, conversely, to the people living in states that have a personal income tax?
A Mercatus Center study answers that question directly, examining the impact of state taxation on economic performance, business growth, and migration rates. The study found:
- a state with a higher personal income tax rate correlates positively with its residents moving to another, lower-tax state;
- increasing a state's average tax rate by 1% creates a 1.9% decrease in the growth rate of that state's Gross State Product;
- the progressivity of a state's income tax negatively correlates with business creation (that is, a 1% increase in personal income tax progressivity is associated with a 1.2% decrease in the growth rate of new firms which are responsible for 20% to 50% of state productivity growth).
Despite what all of those liberals say on those mainstream media, talking-head shows, increasing state personal income taxes leads to decreased economic performance, the size of that effect depending upon the particular tax and economic activity being analyzed.
More significantly, the folks facing higher taxes consume less, produce less, or move to another state to another state. There, they consume more and produce more, leaving the folks remaining behind having to pay even higher state income taxes in their liberal Dystopia...which, of course, they're so happy to do. After all, liberals live and work to pay taxes. It's in their genes.
Let the discussion begin...
To read the Mercatus Center report, click on the following link:
"State Economic Prosperity and Taxation."