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#131 Abraham & Wealth Migration
#131 Abraham and wealth migration
Abraham moved because God told him to. Americans are moving from California and New York to Florida and Texas because the economy is telling them to.
Abraham moved because God told him to. Americans are moving because the economy is telling them to. Predictably, they are moving from high tax states to low tax states. The data to show the movement comes from a government report, so it’s a little out-of-date, but it still proves the basic economic law stating that the demand curve goes down. That means: All else being equal, people seek the same products and services at lower costs. The data is from 2020, and it comes from a Wall Street Journal article titled The Great Pandemic Wealth Migration.
Social scientists spend their entire life waiting for a natural manipulation like the pandemic to see how people will respond. The reason it was such a golden opportunity was, many people stopped working, so they could CHOOSE where to live. Given a choice, economists expect people to choose locations with lower taxes, and guess what: They did.
The data comes form IRS filings, so it’s based on adjusted gross income. In 2020, Florida gained $23.7 billion, Texas $6.3 billion. Arizona, North Carolina, South Carolina, Tennessee, Nevada, Colorado, Idaho and Utah gained less than $5 billion each.
The losing states are so predictable. I’ll employ a teaching technique I use in my econ classroom at Dallas Baptist University: Go ahead, shout out the two states I’m about to say…….and you’re right: The biggest losers, by a LOT, are New York who lost just under $20 billion and California who lost just under $18 billion in income, based on IRS tax returns. This data is so predictable: States 3-5 on the losers list are Illinois, Massachusetts, and New Jersey. Also-rans among the losers are Maryland, Ohio, Minnesota, Pennsylvania and Virginia
Although the data is getting old, there is much more about this in the 2014 book An Inquiry into the Nature and Causes of the Wealth of States. Two of the authors are well-known: Arthur Laffer and Steven Moore. The sub-title is “How taxes, energy, and worker freedom change everything.” Well, of course they change everything. Given a choice, people would rather pay lower taxes, lower energy costs and have more freedom to sell their labor. It’s just that the pandemic put people out of work, and made it easier for them to move. Ceteris paribus means “All else being equal.” The ceteris was not paribus any longer.
Not surprisingly, four of the ten states that gained the most income in the IRS data impose no income tax: Florida, Texas, Tennessee and Nevada. Go figure.
Taxes
In our book, Biblical Economic Policy, Sergiy Saydometov and I state that taxes are stealing, and thus, are a violation of the eighth commandment. Civil societies allow them because we live in a fallen world and they are necessary to control evil. High-tax proponents, usually Democrats, see taxes as a means of punishing wealth and as a means of income redistribution. They are so far along that path that I think to present them with a Biblical view of taxes would just astound them.
Their assumption about punishing wealth is certainly not Biblical, and their assumption that taxes should be used to redistribute wealth is a violation of the tenth commandment: Don’t covet. Most conversations about income inequality are violations of the tenth commandment. And now, states are finding out that given a choice – peo...
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By The Christian Economist | Dave Arnott
4.9
7373 ratings
#131 Abraham and wealth migration
Abraham moved because God told him to. Americans are moving from California and New York to Florida and Texas because the economy is telling them to.
Abraham moved because God told him to. Americans are moving because the economy is telling them to. Predictably, they are moving from high tax states to low tax states. The data to show the movement comes from a government report, so it’s a little out-of-date, but it still proves the basic economic law stating that the demand curve goes down. That means: All else being equal, people seek the same products and services at lower costs. The data is from 2020, and it comes from a Wall Street Journal article titled The Great Pandemic Wealth Migration.
Social scientists spend their entire life waiting for a natural manipulation like the pandemic to see how people will respond. The reason it was such a golden opportunity was, many people stopped working, so they could CHOOSE where to live. Given a choice, economists expect people to choose locations with lower taxes, and guess what: They did.
The data comes form IRS filings, so it’s based on adjusted gross income. In 2020, Florida gained $23.7 billion, Texas $6.3 billion. Arizona, North Carolina, South Carolina, Tennessee, Nevada, Colorado, Idaho and Utah gained less than $5 billion each.
The losing states are so predictable. I’ll employ a teaching technique I use in my econ classroom at Dallas Baptist University: Go ahead, shout out the two states I’m about to say…….and you’re right: The biggest losers, by a LOT, are New York who lost just under $20 billion and California who lost just under $18 billion in income, based on IRS tax returns. This data is so predictable: States 3-5 on the losers list are Illinois, Massachusetts, and New Jersey. Also-rans among the losers are Maryland, Ohio, Minnesota, Pennsylvania and Virginia
Although the data is getting old, there is much more about this in the 2014 book An Inquiry into the Nature and Causes of the Wealth of States. Two of the authors are well-known: Arthur Laffer and Steven Moore. The sub-title is “How taxes, energy, and worker freedom change everything.” Well, of course they change everything. Given a choice, people would rather pay lower taxes, lower energy costs and have more freedom to sell their labor. It’s just that the pandemic put people out of work, and made it easier for them to move. Ceteris paribus means “All else being equal.” The ceteris was not paribus any longer.
Not surprisingly, four of the ten states that gained the most income in the IRS data impose no income tax: Florida, Texas, Tennessee and Nevada. Go figure.
Taxes
In our book, Biblical Economic Policy, Sergiy Saydometov and I state that taxes are stealing, and thus, are a violation of the eighth commandment. Civil societies allow them because we live in a fallen world and they are necessary to control evil. High-tax proponents, usually Democrats, see taxes as a means of punishing wealth and as a means of income redistribution. They are so far along that path that I think to present them with a Biblical view of taxes would just astound them.
Their assumption about punishing wealth is certainly not Biblical, and their assumption that taxes should be used to redistribute wealth is a violation of the tenth commandment: Don’t covet. Most conversations about income inequality are violations of the tenth commandment. And now, states are finding out that given a choice – peo...