Comment on "Soak the Rich, Lose the Rich"
My good friend Steven Moore along with Art Laffer wrote a great piece today in the Wall Street Journal titled Soak the Rich, Lose the RichTheir piece reinforces the general messages of this site, namely that there are Best and Worst States in the U.S. to live, create wealth and grow a business. The story makes a case for common sense state policies of low taxes and favorable business regulatory climate. In the piece Moore and Laffer point out that the no income tax states have created "89% more jobs and had 32% faster personal income growth than their high-tax counterparts." In other words, successful people and businesses go to the more favorable tax and regulatory environments.
We have long advocated state governments to adopt more business and citizen friendly policy. Laffer and Moore bring this issue to the forefront today with their well-written piece. I hope state governors and legislators also read it and take action.
For more on tax policy of states see our posts Best and Worst States for Individual Taxes and Best and Worst States for Business
For those of you interested the nine no income tax states in the U.S. are Texas, Nevada, New Hampshire, Florida, South Dakota, Wyoming, Washington, Alaska and Tennessee. New Hampshire and Tennessee do tax interest and dividends however.
We have long advocated state governments to adopt more business and citizen friendly policy. Laffer and Moore bring this issue to the forefront today with their well-written piece. I hope state governors and legislators also read it and take action.
For more on tax policy of states see our posts Best and Worst States for Individual Taxes
For those of you interested the nine no income tax states in the U.S. are Texas, Nevada, New Hampshire, Florida, South Dakota, Wyoming, Washington, Alaska and Tennessee. New Hampshire and Tennessee do tax interest and dividends however.
Posted by Ed Kopko at 5/19/2009 1:24 PM 
Categories: South Dakota, Wyoming, Alaska, Washington, Nevada, New Hampshire, Best and Worst State for Jobs, Texas, Best and Worst States to Work, Tennessee, Florida
Categories: South Dakota, Wyoming, Alaska, Washington, Nevada, New Hampshire, Best and Worst State for Jobs, Texas, Best and Worst States to Work, Tennessee, Florida
I find the conversation on best and worst states fascinating. I do have a comment and question on this topic, though.
Most states are struggling for ways to increase revenues now and are looking for short-term fixes. The nature of politics tends to lend itself to short term fixes. "I'll survive while I'm in office and then leave the mess to the next administration".
How can states be encouraged to promote lower taxes and a favorable business environment when, in the short-term, this may reduce revenues? It will take time for the improved policies to translate into companies and individuals moving into and investing in the state. Is there a suggestion for helping states convert to a more business friendly model while not losing current revenues until those can be recouped from that additional business moving into the state?
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John, Thanks for the post. You are right. States will get more business in the long run by lowering taxes and improving the climate for business. If states cut costs, they can "pay" for the short term investment. Its a win-win in the long run yet most state governments do not have the foresight to plan with that perspective.
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