Josh Barro, Columnist

Home Prices Drive People Out of California

Josh Barro explores the relationship between high-income-tax states and their housing policies.

February 12, 2013 at 5:58 PM UTC

Josh Barro is the lead writer for the Ticker, Bloomberg View's blog on economics, finance and politics. His primary areas of interest include tax and fiscal policy, state and local government, and planning and land use. Previously, Barro was a Senior Fellow at the Manhattan Institute for Policy Research and a commercial real estate banker at Wells Fargo. He holds a bachelor's degree in psychology from Harvard and lives in Queens, New York.

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Over the past few decades, states with no income tax have significantly outpaced states with the highest income taxes in population growth and therefore in economic growth. Conservatives like to point to this as an argument for cutting state income taxes.

But states in these groups have confounding similarities. For example, the highest income-tax states (a group dominated by California and New York) tend to have restrictive development policies and resultantly high housing costs; no-income-tax states (a group dominated by Florida and Texas) tend to have much easier development rules and lower home prices.