Moving Daze, pt. 5

As has been discussed on multiple occasions elsewhere, things that influence interstate migration - crime rates, employment opportunities, access to high-quality education, housing prices and overall cost of living - are all tangible, palpable measures of the quality of life offered by a particular community. Generally speaking, "many if not most of these indicators are improved in areas of conservative influence."

New information comes to us to suggest that there is at least one other factor that may have an impact on both regional relocations and variances in the economic fortunes of individual states. A recent report from the American Legislative Exchange Council (ALEC) indicates that thousands of Americans move from areas with high tax burdens to locales with greater economic freedom. According to the study, Americans "are voting with their feet for jobs and higher incomes - economic opportunities that are disappearing from some regions of the country while sprouting in others."

The big winners in this interstate competition for jobs and growth have generally been the Southern states (Dixie) and those in the Southwest region of the country, such as Nevada, Idaho, and Arizona. The big losers have been the traditional rustbelt regions of the Northeast and Midwest. The demoralizing symptoms of economic despair in the declining states like New York, Michigan, Pennsylvania, Illinois, and New Jersey include lost population, falling housing values, a shrinking tax base, business out-migration, capital flight, high unemployment rates, and less money for schools, roads, and aging infrastructure.

The report describes California as a "has been" state that has been ravaged by "years of redistributionist economic policies." It also labels the Northeast as "America's Economic Black Hole" based on "oppressive tax rates, mindless and meddlesome regulation, obese social welfare programs, slumping real estate markets, and a steady stampede of outward migration."

Lest we doubt, a Wall Street Journal op-ed discussing the ALEC study cites specific examples that evidence the effects of taxation on state-to-state population flows.

Politicians who think taxes don't matter might want to explain the Dakotas. North Dakota ranked second worst in out-migration last year, while South Dakota ranked in the top 10 as a destination. The two are similar in most regards, with one large difference: North Dakota has an income tax and South Dakota doesn't.

Here's another example. The only Pacific Coast state to lose migrant population in 2007 was California, which has the highest state income tax in the nation. This is the continuation of a dismal 10-year performance with nearly one and a half million Golden Staters leaving what was once the premier destination state in America.

Meanwhile, next door, Nevada was second among the states in new families -- and a big percentage of the new arrivals are Californians. Nevada has no income tax. High income Californians can buy a house in Las Vegas for the amount of money they save in three or four years by not paying California income taxes.

This hemorrhaging of people and resources is not without consequences. As we have seen in once-great cities such as Camden, New Jersey, Detroit, Michigan and Cleveland and Youngstown, Ohio and in large swaths of rural America, a rampant and sustained population outflow ends up hurting those who are most in need. The ALEC report explains specifically how economically-induced migrations impact the impoverished most negatively.

Defenders of the high-tax and high-spending conditions that precipitate this fall into the economic cellar argue that big government policies and taxes on the wealthy are necessary to protect the poor and the disadvantaged. Yet when flight occurs away from an area, it is always the highest achievers and those with the most wealth, capital, and entrepreneurial drive who tend to "get out of Dodge" first, leaving the middle class, and then eventually only the poor and disadvantaged, behind. Inevitably that means fewer taxpayers and heavier tax burdens for those who remain.

To be sure, when urban areas in particular collapse under the weight of confiscatory taxation, the negative consequences fall disproportionately on those who do not have the financial wherewithal to evade the fallout.

Therefore economic liberalism places a two-phased burden on those who are subjected to it. The short-term effect of high taxes is to remove money from the most productive segments of local economies; these monies temporarily enrich government, but inevitably create measurable hardships for businesses and the public more generally. All of this is soon followed by the longer term sequelae of private sector destabilization or displacement - or most likely both. And as with other forms of progressivism (e.g., environmentalism, feminism, multiculturalism, etc.), the damage that is done to society is never acknowledged - let alone ameliorated - by those who work to bring it about in the first place.