A couple of items published in the last few days provide still more evidence that high income taxes hurt state economic growth. This article from the New York Post includes anecdotal evidence discussing what most suspect: New York’s high income taxes are prompting successful professionals to leave for no-income tax Florida. These people bring their income, tax revenue, and most importantly their jobs with them.
An increasing number of financial firms, especially private equity and hedge funds, are fed up with New York’s sky-high city and state tax rates and are relocating to the business-friendly climate in Florida’s Palm Beach County.
“We’re not doing a multimillion-dollar marketing campaign. We don’t need to,” said Kelly Smallridge, who heads the Palm Beach County Business Development Board, which set up the special unit to handle inquiries and marketing.
“They’re coming to us.”
Without warning, Smallridge said, her organization only recently started getting inundated with hedge-funders.
“The door was open because of the high-tax environment” in the New York area, Smallridge said.
“Smaller companies were moving completely out. Larger ones, looking for expansion opportunities, wanted to expand here,” she said while touting her group’s “free and confidential” consulting services.
Further, the Maine Heritage Policy Center released this report showing that its high personal income taxes are partly to blame for its state’s economic struggles. The study shows how Maine has far fewer high-income earners than neighboring New Hampshire – a state with virtually identical population size but no state tax on earned income.
A significant share of these high income earners are small business owners, and as such fewer high-income earners means fewer job opportunities for everyone else.