January 22, 2018
Do You Live in One of These States That People are Fleeing?
Dropping Population Means Less Representation in Congress
The census bureau came out with estimates on which states will gain or lose congressional seats after the 2020 census. Congressional seats are apportioned by population.
Most of the states with dropping populations are high tax states. California, Rhode Island, and New York are all expected to lose Congressional seats. Illinois is hit especially hard with a fleeing populous, so much so that it may lose two seats.
Illinois suffered the largest net population loss of any state in the past year, and due to that loss, it was overtaken by Pennsylvania this year as the fifth-largest state in the country. Major tax increases passed in 2017 will certainly not help this downward economic spiral.
Illinois also lost a seat after the 2010 census, and New York lost two. But both states continue to push for higher taxes and more regulation.
Beginning this year New York mandates 8 full weeks of paid time off for private sector employees who have or adopt a child, or need to help when a family member gets sick or deployed overseas. Last year New York passed a regulation that forced employers to schedule employees two weeks in advance or pay for an extra two hours per shift.
A New York court last year restricted a dairy farm from spreading manure on their land, despite the fact that it was allowed when the land was purchased. And New York has the highest corporate tax burden in the nation.
It shouldn’t be surprising that people are opting instead to live in states like Florida, which gained two Congressional seats after 2010 and is expected to gain another two after 2020. Florida has no state income tax.
Texas is another state with no income tax and a growing economy. They poached so many residents from other states that they gained four Congressional seats after the 2010 census, and are expected to add another two or three after 2020.
Other Factors for Migration With the USA
It should be obvious that higher taxes will make a state less attractive. At times states inadvertently admit this. For instance, the Supreme Court has agreed to decide the case of online sales tax. States argue that brick and mortar stores are at a disadvantage because it is harder to compete with online stores that are not required to collect sales tax.
But the state governments are too greedy to simply eliminate the sales tax. This would attract more business to the state. Without a sales tax, people are not discouraged from spending. Overal revenues for companies would grow, which means higher corporate and personal income.
Unfortunately, Florida and Texas have relatively high sales tax burdens. But they are still only ranked two spots behind California and New York. Most states have tradeoffs, but some are just overall stifling.
Of the ten states with the highest minimum wage, three are also states expected to lose a Congressional seat after the 2020 census: California ($10.50 minimum wage), New York ($9.70), and Rhode Island ($9.60). Massachusetts has the second highest minimum wage in the country at $11 per hour, and it lost a Congressional seat after the 2010 census.
High minimum wages add extra costs for employers. But it also robs low skilled laborers of opportunities. Some of those fleeing high minimum wage states are likely unable to find work. High minimum wage raises the threshold for hiring. Even if the job requires the skill set of an $8 per hour earner, when the minimum wage is $11 per hour, an employer can be more selective about who they hire. Low skilled laborers have no opportunity to grow their skill set because of this barrier to entry.
Already states compete for workers and residents. But federal tax rates and regulations hamper that competition.
Perhaps California’s recent opposition to the Trump administration could spur folks of all political stripes to push for limited federal government. The more local you make government the easier it is to control, or simply, move away from.
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