- - Monday, August 18, 2014

Florida can brag about a lot more than its warm weather. Its low tax burden has caught the attention of nearly 2 million people over the last couple decades, and they brought more than $100 billion of income to the state.

People from New York, New Jersey and even Wisconsin have been moving to Florida in droves. Yes, the weather is much nicer in Ft. Lauderdale in January than in Green Bay, but keeping more of your own money seems to be a major influence.

I am not talking about small amounts, either. A recent report published by the John K. MacIver Institute for Public Policy and the National Center for Policy Analysis shows there is a big advantage to moving to low-tax states.

According to the study, a 40-year-old married couple who own a home and earn $75,000 a year would gain $223,735 over the rest of their lifetime if they moved to Florida from Wisconsin.

When weather is taken out of the equation, the Dairy State is still at a loss. It would be advantageous for this same couple to move to three of the four states that share a border with Wisconsin. Only Illinois has a worse tax climate.

In fact, if they chose to move to Minnesota, the couple would gain more than $50,000 in lifetime wealth. This hypothetical couple would be better off in different states, but does that mean people are really leaving Wisconsin?

The answer is an astounding yes. Wisconsin loses $136 million annually in adjusted gross income, totaling nearly $2.5 billion in the last 20 years.

An even bigger problem for Wisconsin is the people who are leaving may be the ones paying the most in taxes.

As the study points out, higher-income residents would find it beneficial to move to other states, but it also finds that lower-income individuals are in a different boat thanks to Wisconsin’s progressive tax system.

A 25-year-old renter making $30,000 a year is better off in Wisconsin than Illinois, Iowa and Minnesota. But, as this taxpayer earns more and purchases a home, it becomes advantageous to move to Iowa or Minnesota. Essentially, the state is penalizing taxpayers for being more successful.

Luckily, there is good news for Wisconsinites. Gov. Scott Walker, Wisconsin Republican, and state lawmakers have made it a priority to reform taxes. The tax code has been simplified – eliminating 17 special interest tax credits and reducing the amount of tax brackets from five to four.

Property taxes have been frozen at 2010 levels and income tax rates have been cut for everyone. In total, the state’s residents have seen $2 billion in tax relief since 2011.

Even with this dramatic shift toward tax reform, Wisconsin is still lagging its neighbors and states across the country. If the state wants to be a national competitor for new businesses, investment and job creation, it must keep reforming its tax code and reducing the overall tax burden.

Just see what Florida has been able to do. When looking at a direct comparison to the Sunshine State’s tax climate, it is amazing that more people – and their money – are not moving away from Wisconsin.

Florida’s median property tax rate is 0.97 percent. Wisconsin’s rate is nearly double at 1.76 percent. Florida residents have no state income tax. Wisconsin’s income tax rate tops out at 7.65 percent.

So why have more states not adopted the Florida model?

The simple answer is that government at every level is addicted to spending. Just look at the national debt, which is quickly approaching $18 trillion. We cannot permit the states to travel down this same path.

Florida is already a leader when it comes to lower taxes, but other states need to do the same thing. My home state of Wisconsin is on its way, but there is still a lot of work to do.

For now, I can be thankful that Wisconsin is headed in the right direction, and that I don’t live in Illinois.