Fleeing Geese

Government’s thirst for Other People’s Money is bottomless. Especially when that government is dominated by Team Blue. The two most heavily taxed states in America (California and New York) have long been dominated by the Democratic Party, even when they had Republican governors, and today, the GOP is an irrelevance in both. Rounding out the Top Ten, we find (in order) CT, HI, NJ, MA, ND, VT, IL, and MN. Of those, only North Dakota is Team Red.

Consider this table (data from 2024).

Now, look at this graphic.

Notice anything?

The first three states in the table have had the biggest out-migration in the first half of this decade. The 5 others are all high in-migration states.

That also happen to be zero income tax states. Somehow, those states, despite spending a lot less per resident, are drawing new residents.

Next, ponder that California is unsatisfied with being the second-highest taxing state in the country, and is proposed a “one-time” (HAHAHA) 5% “wealth tax” (i.e. a tax on assets, not income) on any resident worth over $1B. In response to the suggestion alone, several billionaires have moved out of California (to zero tax states like FL and NV), and more are considering leaving.

Big-government types entertain a fantasy that the ultra-rich don’t care enough about the taxes they pay to disrupt their lifestyles when those taxes are increased. They’ve convinced themselves that the allure of high-culture life in NY and CA is so strong that they’ll pay rather than flee, so they feel that they can safely raise tax rates without harming overall revenue.

The above data tells a different story.

As does a cautionary tale from Norway.

This isn’t a new or rare phenomenon.

In the early 1970s, the Rolling Stones famously left the UK to avoid the ridiculous 90+% top income tax bracket. So did Pink Floyd, Richard Burton, and others.

Last year, a rules change in the UK drove over 16,000 millionaires out of the country.

Refuters of this phenomenon argue that America had a top tax rate of 91% in the 1950s and had a great economy, but they ignore the simple fact that almost no one actually paid that rate. They worked within existing law and tax code to avoid it. Common sense tells us that no one would be stupid enough to work extra just to give almost all that extra work produced to the government, but common sense takes a back seat to motivated reasoning and the lust for Other People’s Money (OPM).

Despite all this, California’s geniuses in government think that their wealth tax (constitutionality problems aside) is a Great Idea that will give them even more opportunity to spend OPM on things like the high speed rail boondoggle. That it’s backed by multiple unions (who also spearheaded the minimum wage increases that shuttered over a thousand small businesses) tells us that we have to stop trusting self-serving midwits with power over our lives.

People react to changing rules. When it comes to taxation, Hauser’s Law - an observation that, no matter the structure of America’s tax code since WWII, total income tax revenue remains steady-state at 19% of GDP - reports that reality. So does the Laffer Curve.

But, the greedy (and no, it’s not greed to want to keep what you earned) prefer to ignore simple truths.

All this is a reflection of a Thomas Sowell aphorism.

The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

And a reality about political promises. Delivering the promise, in this case higher taxes on the rich, is enough to garner votes. Failure of the promise to produce the desired outcome is mostly irrelevant.

Why?

Because people have short attention spans and only superficial interest in actual outcomes. And because people are selfish and envious and have few quibbles about taking what others have produced. Especially when such theft is legalized by government.

The notion of taxing assets - and here I’m not talking just about unrealized capital gains, but wealth that has already been taxed as well - should deeply offend any person with a sense of propriety. Especially when the wealthiest in America already pay the lion’s share of taxes. Assertions that the rich don’t pay “their fair share,” or that they live off the backs of everyone else, are easily disproved lies. That they persist when the data that refute them is a tell-tale that the truth is secondary to covetousness and a desire to freeload off others.

The Left’s answer to this reality of tax-migration isn’t to accept that they cannot just tax endlessly and spend bottomlessly. Instead, they seek to punish the migrants via exit tax proposals, and to impose their punitive taxes at the national level.

And globally.

Behold, the Democrats’ dream team. Gavin Newsom and Alexandria Ocasio-Cortez, kissing European derrieres in Munich, where AOC asserts a national wealth tax should be pursued “expeditiously.”

Now youse can’t leave. -- S. LoSpecchio

Meanwhile, California loses tens of billions each year to waste and fraud. California’s high-speed rail link from LA to SF, originally promised at $33B, has quadrupled in estimated cost even as its scope has been dialed back. Nationally, Elon Musk estimates that a trillion dollars a year - one dollar of every five collected - one dollar of every seven spent - fully half the budget deficit - is lost to fraud, waste, duplication, corruption, etc.

How about, before they try to pluck us even further, they do a better job spending what they already collect?