High Tax States Are Practicing Financial Destruction
SALT has been characterized as soaking the rich, but it soaks a lot of other people, too.
High income households are fleeing high tax states.
Photographer: Scott Olson/Getty Images North AmericaIt is clearer than ever that the U.S. Tax Cuts and Jobs Act of 2017 made high tax states less competitive with low tax states. But instead of using this moment to reflect on how taxes influence behavior, politicians in places such as Connecticut, New York, New Jersey and Illinois are inexplicably doubling-down by threatening to raise taxes on their citizens even more.
Until politicians start to understand the benefits of economic incentives and an equitable tax system, expect these high-tax states to continue down the road to financial depredation as taxpayers pick up and leave in greater numbers. This is why it’s worth keeping a close eye on recent developments in New Jersey, where the Democrat-controlled legislature last week approved a $38.7 billion budget that scraps Governor Phil Murphy’s proposed millionaire’s tax, raising the risk of a government shutdown.