In the Wall Street Journal today, Stephen Moore and Arthur Laffer make the excellent point that states with high taxes drive away jobs, prevent jobs from relocating to those states, and spur severe budget problems. They argue:
Here’s the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.
It’s a basic principle that is seemingly not understood by policymakers in many state capitals and in Washington. The authors continue:
The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.
Here’s hoping that South Carolina gets its act together and becomes one of those states that’s increasingly attractive to businesses leaving California, New York, and New Jersey. The full article is well-worth the read.