Over time, I’ve accomplished quite a few posts pointing to the truth that states with out an earnings tax are likely to develop quicker than extra extremely taxed states. Part of that development is said to the post-WWII sunbelt phenomenon. However not all. States missing an earnings tax are likely to develop quicker than even close by states with an analogous local weather.
Washington is one other fascinating case—one of many few northern states with out an earnings tax. And Washington has additionally been one of many quickest rising northern states—till now. Right here’s the Wall Road Journal:
An fascinating pure experiment has been Washington state, which gained tens of hundreds of individuals from different states on internet every year within the final decade. However since enacting a 7% capital-gains tax on larger earners in 2021, Washington has been dropping residents to different states at an accelerating tempo—15,276 this previous 12 months. Might that be a purpose, or is Seattle’s crime downside a greater clarification?
I doubt whether or not crime is the decisive issue—Texas and Florida even have loads of crime.
That’s to not recommend that taxes are the one difficulty. Strict zoning legal guidelines preserve property costs excessive in locations like California and New York, and that additionally slows inhabitants development. However zoning can’t clarify why Washington abruptly went from being a excessive development state to a sluggish development state. Taxes are crucial, particularly earnings taxes.
