States with no income tax grow at a slower rate (1 Viewer)

UncleDoug

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Look at the finances of the states and then ask which states are better off.

New York, Illinois, & California all have high income tax and their finances are rated the worst out of all 50 states. Texas does not have an income tax and Texas has the highest migration, highest job creation and its finances are rated among the best. There are other factors to consider so this simple comparison is not very useful or helpful.
 

wcklink

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Look at the finances of the states and then ask which states are better off.

New York, Illinois, & California all have high income tax and their finances are rated the worst out of all 50 states. Texas does not have an income tax and Texas has the highest migration, highest job creation and its finances are rated among the best. There are other factors to consider so this simple comparison is not very useful or helpful.
Bingo, the low tax states have already siphoned off huge numbers from the high tax states in the last 10-15 years.
 
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BuffaloSaint

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Look at the finances of the states and then ask which states are better off.

New York, Illinois, & California all have high income tax and their finances are rated the worst out of all 50 states. Texas does not have an income tax and Texas has the highest migration, highest job creation and its finances are rated among the best. There are other factors to consider so this simple comparison is not very useful or helpful.
Ok lets compare NY, ILL and CAL with three states that don't have income tax. Texas, Florida and Nevada.

Median Household Income by state

NY 55K
ILL 53K
CA 57K

TEX 49K
FL 44K
NV 48K

I'll edit this thing later when I look up education rankings and some other factors. Looking at how much debt a state has is a piss poor way to decide if their taxation system is a good idea.
 

rob22278

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Ok lets compare NY, ILL and CAL with three states that don't have income tax. Texas, Florida and Nevada.

Median Household Income by state

NY 55K
ILL 53K
CA 57K

TEX 49K
FL 44K
NV 48K

I'll edit this thing later when I look up education rankings and some other factors. Looking at how much debt a state has is a piss poor way to decide if their taxation system is a good idea.
And looking at median household income is a piss poor way to compare states. The cost of living is considerably higher in the 3 states you listed, due in part to having some of the highest state income tax rates.
 

wcklink

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And looking at median household income is a piss poor way to compare states. The cost of living is considerably higher in the 3 states you listed, due in part to having some of the highest state income tax rates.
You better believe your money goes a lot farther in the low tax states.49K in texas is worth 75K in any of the other 3. I'd guess just the local and state taxes would drop that income to below that of Texas in all 3 instances.
 

Mr. Sparkle

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In debating the "Red vs. Blue" models, it all depends on how you group the states.

Joel Kotkin: America's Red State Growth Corridors - WSJ.com

These trends point to a U.S. economic future dominated by four growth corridors that are generally less dense, more affordable, and markedly more conservative and pro-business: the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt.

Overall, these corridors account for 45% of the nation's land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.

Historically, these regions were little more than resource colonies or low-wage labor sites for richer, more technically advanced areas. By promoting policies that encourage enterprise and spark economic growth, they're catching up.

Such policies have been pursued not only by Republicans but also by Democrats who don't share their national party's notion that business should serve as a cash cow to fund ever more expensive social-welfare, cultural or environmental programs. While California, Illinois, New York, Massachusetts and Minnesota have either enacted or pursued higher income taxes, many corridor states have no income taxes or are planning, like Kansas and Louisiana, to lower or even eliminate them.


The result is that corridor states took 11 of the top 15 spots in Chief Executive magazine's 2012 review of best state business climates. California, New York, Illinois and Massachusetts were at the bottom. The states of the old Confederacy boast 10 of the top 12 places for locating new plants, according to a recent 2012 study by Site Selection magazine.
 

UncleDoug

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Ok lets compare NY, ILL and CAL with three states that don't have income tax. Texas, Florida and Nevada.

Median Household Income by state

NY 55K
ILL 53K
CA 57K

TEX 49K
FL 44K
NV 48K

I'll edit this thing later when I look up education rankings and some other factors. Looking at how much debt a state has is a piss poor way to decide if their taxation system is a good idea.
Now compare the cost of living of those states and adjust your numbers for that. I was not refuting the assertion of the article with the post. I was pointing out flaws in the data submitted as evidence.
 

dtc

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You better believe your money goes a lot farther in the low tax states.49K in texas is worth 75K in any of the other 3. I'd guess just the local and state taxes would drop that income to below that of Texas in all 3 instances.
I guess you've never seen a property tax bill in TX.

FYI, they're pretty freaking sporty.
 

Saint by the Bay

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I guess you've never seen a property tax bill in TX.

FYI, they're pretty freaking sporty.
They are, but even high income folks like me with giant houses (thus giant property tax bills) are better off than I would be paying state income tax and slightly lower property tax in other states. Also, the property taxes are highly localized. It's mostly school bond and MUD taxes. That means my taxes are directly effecting me in a way state income tax doesn't. I can see directly the results of my property taxes in the amazing schools in my district and fantastic roads, drainage and infrastructure. That can't be said when your taxes are going to a generalized state fund.

I think the Texas tax model is fantastic. It also helps young professionals starting their lives/careers because before they own property they have little to no tax burden beyond Federal.
 

Goatman Saint

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While some of California's population loss may be due to taxes, there are two other major players that are more telling. First, retired people are leaving because this is an expensive state to live in. If you have a house reasonably paid off, and a good CA retirement your standard of living will go up by getting out. The other major factor is that many young people without college degrees are moving to Texas or the South for the needs of uneducated labor. Yes, some highly educated people have jumped to Nevada, but as a whole that group of people is staying in CA.

Also, California's unemployment is high for two reasons. First, there have been massive state layoffs in the last few years. In 2007 California had the second lowest state employees to citizens ratio. http://www.ccsce.com/PDF/Numbers-oct08-govt-employees.pdf There have been massive layoffs in the last 3 years in every area. Private sector is actually relatively healthy here. The other major one is that lower income ag jobs are declining rapidly with crop changes that require much less manpower. Many lower income wage earners are going to the South as the pay/cost of living ratio is much better.

What has killed this state is the property tax freeze passed under prop 13. It took a relatively stable source of income away and made the state more reliable on income, sales and capital gains, all of which decrease (sometimes dramatically) during a recession.
 

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dtc

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They are, but even high income folks like me with giant houses (thus giant property tax bills) are better off than I would be paying state income tax and slightly lower property tax in other states. Also, the property taxes are highly localized. It's mostly school bond and MUD taxes. That means my taxes are directly effecting me in a way state income tax doesn't. I can see directly the results of my property taxes in the amazing schools in my district and fantastic roads, drainage and infrastructure. That can't be said when your taxes are going to a generalized state fund.

I think the Texas tax model is fantastic. It also helps young professionals starting their lives/careers because before they own property they have little to no tax burden beyond Federal.
That's a very valid set of points and not living in TX,(thankgod) I have little first hand knowledge of the facts. All I do know is that you're right about the local impact on schools and that the disparity between high income districts and low is too much for my taste.
 

Severum

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They are, but even high income folks like me with giant houses (thus giant property tax bills) are better off than I would be paying state income tax and slightly lower property tax in other states. Also, the property taxes are highly localized. It's mostly school bond and MUD taxes. That means my taxes are directly effecting me in a way state income tax doesn't. I can see directly the results of my property taxes in the amazing schools in my district and fantastic roads, drainage and infrastructure. That can't be said when your taxes are going to a generalized state fund.

I think the Texas tax model is fantastic. It also helps young professionals starting their lives/careers because before they own property they have little to no tax burden beyond Federal.
I didn't realize Texas property taxes were over 2.5% in some areas with limited exemptions. That would be tough to swallow on rentals and commercial property. Are assessments close to FMV or undervalued?

Washington has no income tax and 0.25% higher state sales tax (6.5%), but property taxes only average around 0.9% FMV.
 

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