Blue states losing population and political clout to low tax states
States with high taxes are at risk of losing people, business and money. In fact, conservative economists Arthur Laffer and Stephen Moore argue that up to 1.3 million people will leave California, Connecticut, New Jersey, Minnesota and New York over the next three years and move to states with lower taxes.The Democrats answer to this dilemma is to raise everyone's taxes more. I will be shocked if that is an election-winning idea.
The sweeping overhaul of the federal tax code passed by the Republican-controlled Congress and signed into law by President Trump in December has left both residents and elected officials from high-tax states in a precarious position.
With state deductions now capped at $10,000, the cost of living in states such as California and New York – where state taxes are notoriously high – is increasing substantially. This has the potential to lead both middle-class families, and even the wealthy, to begin questioning whether it is time to move to a more tax-friendly state.
This means potentially bad news for Democrats, as solid blue states are generally those with the highest state taxes. If they lose enough people, these states will eventually get fewer seats in the House of Representatives and fewer votes in the Electoral College, which determines who is elected as president.
In one high-profile example of the impact of high taxes, professional golfer Phil Mickelson recently slammed California’s taxes and threated to leave the state. “If you add up all the federal and you look at the disability and the unemployment and the Social Security and the state, my tax rate's 62, 63 percent,” Mickelson said.