The Wall Street Journal
A new study says taxes are driving people away.
An old saying goes that the time to live in New York is when youre young and poor or old and richotherwise youre better off somewhere else. That wisdom is getting an update this week from a study by the Empire Center for New York State Policy that shows middle-class people leaving the state in droves.
Between 2000 and 2008 the Empire State had a net domestic outflow of more than 1.5 million the biggest exodus of any state with most hailing from New York City. The departures also have perilous budget consequences since they tend to include residents who are better off than those arriving. Statewide departing families have income levels 13 higher than those moving in while in New York County (home of Manhattan) the differential was even more severe. Those moving elsewhere had an average income of $93264 some 28 higher than the $72726 earned by those coming in.
In 2006 alone that swap meant the state lost $4.3 billion in taxpayer income. Add that up from 2001 through 2008 and it translates into annual net income losses somewhere near $30 billion. That trend is part of a larger march for New York: In 1950 the state accounted for 19 of all Americans but by 2000 that number had fallen to 7. The citys main saving grace has been its welcome mat for foreign immigrants who have helped to replace some of those who flee.
As the studys authors E.J. McMahon and Wendell Cox suggest no single reason can be fingered for a million migrants seeking their fortunes across state lines but one place to start is New Yorks notorious state and local tax burden. According to the Tax Foundation between 1977 and 2008 New York has ranked first or second in the country for its state-local tax burden compared to the U.S. average.
In the years considered by the Empire Center study New Yorks state and local tax burden ranged between 11 and 12 of income. The peak year for taxes 2004 was followed by the peak year for departuresas New York lost nearly 250000 people to other states in 2005. And thats before another big tax hike this year.
That pattern is consistent with the annual migration patterns showing that highly taxed and economically lackluster states were most likely to end up in residents rear view mirrors. According to the annual study by United Van Lines states like New York New Jersey Michigan and Illinois have been big losers in recent years.
In the Empire Center study two of the top states to send taxpayers to New YorkIllinois and Michiganwere also among the worst population losers overall. Greener pastures that drew New Yorkers included states like Florida North Carolina and Pennsylvania in addition to the usual suburban locales of New Jersey and Connecticut.
Liberals continue to insist that they can raise taxes ever higher without any effect on behavior but the New York study is one more piece of evidence that this is a destructive illusion.
