Why New Yorkers Are Rushing For The Exits

How many times has the Lexington Libertarian posted articles about how Democratic California is bleeding and sending jobs and people to Republican Texas? And then there is Detroit and Illinois and New Jersey, all Democrat states for a long while with some recent exceptions. But in most cases the damage is too far gone for Republicans to resurrect their state.

High taxes, burdensome regulations, business punishment, high welfare benefits, are stopping business expansion and start-ups and creating high unemployment in Democrat states. Some of these states are hemorrhaging. We now add New York to the List.

The US Census Bureau announced last week that New York slipped to fourth place in population among the 50 states.

Though babies are still born here every day, and immigrants still flock in, overall population growth lags because New Yorkers are abandoning the state.

Don’t blame the weather. Blustery Montana and North Dakota aren’t having this problem. New Yorkers are escaping high taxes and dismal job growth.

Other high-tax states like Illinois and New Jersey, which has the country’s second-highest tax burden, are also hemorrhaging residents. Families are uprooting and moving to places with lower taxes, more growth and fossil-fuel-friendly policies.

In the November elections, voters in Illinois expelled their high-tax incumbent Democratic governor, Pat Quinn, while voters in Massachusetts and Maryland rebuked tax-and-spend Democrats by putting the governor’s seat in GOP hands.

Not so in New York, where incumbent Democrat Andrew Cuomo easily won a second term against his Republican challenger, Rob Astorino.

Cuomo has tweaked the state’s tax policies by lowering the corporate-income-tax rate from 7.1 percent to 6.5 percent, exempting more assets from the death tax and temporarily capping annual increases in property taxes.

But none of these minor changes has moved the economic needle. According to the latest state Labor Department data, job growth in New York is half the national average.

Astorino put forward a bold tax-cut plan, but got nowhere. Instead, New Yorkers are voting with their feet.

So are New Jerseyans. Despite having a Republican governor, they’re among the most taxed Americans, and nearly 200,000 decamped in the last four years in search of a better deal.

As Arthur Laffer, Steve Moore and co-authors have shown in their book, “The Wealth of States,” high taxes depress job growth, while states with zero or low income taxes outpace the others in job growth decade after decade.

New Jersey was a high-growth state until it added an income tax in 1976.

A National Bureau of Economic Research report released this month demonstrates that when a state adopts a corporate income tax or raises it, the result is “significant reductions in employment and income.” California is the poster child for such tax hikes.

No surprise that despite California’s sunny climate, some 171,000 residents have fled that state in the last four years. Many have gone to Texas, which altogether gained 533,000 residents relocating from other states. They moved for better job opportunities.

“Toyota didn’t leave California for Texas for the weather,” says Moore.

It’s not climate that counts. It’s business climate.

New York’s governor glosses over this reality, falsely claiming that his Start-Up NY program of business-tax-free zones make it “less expensive for businesses to locate in New York state.”

If that were true, private-sector job growth in the state wouldn’t be an anemic 1.3 percent, far below the national average of 2.3 percent during the last year. The 41 companies participating in Start-Up NY have produced an average of 43 jobs each. Pathetic.

No wonder that in the 52 counties north of Westchester, job growth is a minuscule 0.4 percent.

To remedy that, Cuomo is foolishly gambling on casinos. As Atlantic City’s collapse shows, gambling is no panacea. The governor should heed the commercial and take a weekend and “do AC” — he can tour all the closed casinos.

Shortly after his re-election, Cuomo finally leveled with New Yorkers by issuing his long-awaited verdict on fracking: He banned it.

Count on thousands more New Yorkers along the Southern Tier, who had hoped to stay and earn a living in a new, booming natural-gas industry, to flee now to Pennsylvania and other fossil-fuel-friendly states. Oil and gas development made North Dakota the big winner in last week’s Census Report.

Where else are Americans choosing to move? Arizona, Colorado, Florida, Montana, Nevada, South Carolina and Texas. All low-tax states.

It proves what you see Florida advertising on TV: “It’s not how much you make. It’s how much you get to keep.”

Betsy McCaughey is a former lieutenant governor of New York and senior fellow at the London Center for Policy Research.


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