Once-big and powerful states are shrinking. Suffocating under the weight of liberal policies, powerhouse states have atrophied into uncompetitive and unwelcoming weaklings.
It’s all laid out in a report by the American Legislative Exchange Council. Co-authored by Arthur Laffer, a Reagan economic adviser, and Stephen Moore, an economist at the Heritage Foundation, the report titled “Rich States, Poor States” identifies key ingredients of a thriving economy: low personal and corporate income-tax rates, reasonable property- and sales-tax burdens, restraint on the number of government employees and curbs on state spending.
Conversely, big-government policy decisions such as onerous tax burdens, an elevated minimum wage and high rates of public debt have put people and businesses to flight.
New York holds the dubious distinction of imposing the nation’s most burdensome corporate-tax rate, which encourages businesses to relocate to friendly territory. The country’s highest — and most “progressive,” read “liberal” — marginal personal state income-tax rate is imposed in California. Many wealthy Californians have bolted, taking their tax dollars with them. In Illinois, where jobs are scarce and the economy is reeling, the state maintains a suffocating property tax, high levels of public debt, a steep minimum wage and exorbitant workers’ compensation costs.
No surprise, then, New York, California and Illinois are the three states that have lost the most population over the past decade.
More than 1.5 million people fled New York over the past decade. Since 1960, New York has lost 14 congressional seats and the influence that goes with them. Even the year-round summer weather and gorgeous mountains, forests and beaches haven’t been enough to persuade 1.4 million Californians to suffer the high taxes and other naive and destructive liberal policies. In Illinois, 623,467 have migrated elsewhere.
The population bleeding has serious financial consequences. New York lost an astonishing $68.1 billion in adjusted growth income from 1992 to 2010, according to Internal Revenue Service data. California lost more than $45 billion over the same period. Things are so bad in Illinois that total nonfarm-payroll employment actually decreased by 1.6 percent between 2002 and 2012. This means fewer productive citizens to bear the burden of the lavish public-sector pensions.
So where have New York, California and Illinois’ residents, businesses and jobs gone? To happier states, including Texas, Washington, Arizona, North Carolina, Georgia and Florida, all boasting reasonable tax rates and a welcoming business climate. These states are flush with successful businesses and hundreds of thousands of new residents.
The American Legislative Exchange Council finds that the states that scored among the 10 best, based on “15 policy areas that have proven over time to be the best determinants of economic success,” gained 2.2 million residents over the past decade. The population of the states that scored in the bottom 10 dwindled by more than 400,000.
Supreme Court Justice Louis Brandeis once called the states “the laboratories of democracy.” The results from the great experiment are in, and there’s no questioning the result. It’s an omen for the states where liberal nostrums prevail, where people, like Elvis and common sense, have “left the building.”