High taxes kill states. There can be no better evidence than the 2010 Census, which was just released. The states that lost congressional seats — the states that are shrinking — had taxes 27 percent higher than the ones that gained seats — the states that are growing.
In fact, of the seven states that do not have a personal income tax, four (Texas, Florida, Nevada and Washington state) account for eight of the 12 seats apportioned to the fastest growing states.
New York state and Ohio just lost two more seats in Congress as a result of the census of 2010. Other losers — down one each — are Massachusetts, Missouri, Michigan, New Jersey, Pennsylvania, Illinois, Louisiana and Iowa. What do they each have in common? High taxes.
Texas, with the second lowest taxes in the nation, gained four seats, Florida picked up two and Arizona, Georgia, Nevada, South Carolina, Utah and Washington state each gained one congressional seat. They all have low taxes in common.
The states that lost seats ranked an average of 24th in taxes and had an average tax burden of $2,267 per capita (weighted more toward the states that lost more than one seat).
The states that gained seats ranked an average of 39th in taxes and had an average tax burden (weighted) of $1,788 — 27 percent lower than the losing states.
People vote with their feet and flee to low tax states. It’s not the climate. It’s the taxes.
This table reflects the states that gained and lost congressional seats, along with their tax burden per capita:
States that Gained Seats and Their Per Capita State Tax Burden
Texas (four seats) —— $1,434
Florida (2 seats) —— $1,905
Arizona —— $1,854
Georgia —— $1,726
Nevada —— $2,347
South Carolina —— $1,719
Utah —— $1,904
Washington state —— $2,359
Weighted Average: $1,788
States that Lost Seats and Their Per Capita State Tax Burden
New York (2 seats) —— $2,665
Ohio (2 seats) —— $2,094
Massachusetts —— $2,818
Michigan —— $2,324
New Jersey —— $2,781
Pennsylvania —— $2,193
Illinois —— $2,069
Iowa —— $1,948
Louisiana —— $1,909
Missouri —— $1,645
Weighted Average: $2,267
While the population of New York City grew from 7.3 million in 1990 to 8.0 million in 2000 to 8.4 million in 2010, the population of upstate New York shrank dramatically.
In the past decade, 1.7 million people left New York State, the largest exodus any state experienced. Upstate New York is dying, killed by high taxes.
The New York City metropolitan area can grow despite high taxes. It is the historical center for new immigration, a glittering attraction for national migration within the United States and the foremost global city. But with no such attractions to offset its high taxes, upstate New York is experiencing catastrophic declines.
Consider the plight of Buffalo. In 1960, it had half a million people. Now it has a quarter of a million! It has lost half its population in 50 years. Yet the politicians in New York state and the other high-tax states, like farmers beating a dying horse to get it to plow one more furlough, raise taxes to squeeze one last bit of revenue from upstate before it dies.
Supply-side economics — lowering taxes in the upper brackets to attract wealthy taxpayers — may or may not work internationally. But it certainly works within the United States. The states that lost population drove out their high-income taxpayers with increases in local taxes. As New York and other high tax states confront their budget difficulties, they need to be mindful of this trend, lest they use their mounting deficits as a pretext to tax their states into oblivion. You can’t keep beating a dead horse.