New York increased taxes $7.8 billion this year to "balance" the budget. The personal income tax has risen to 8.97%. It also gives New York City residents the highest income tax rate in the nation at 12.62%. Additionally, over $3.8 billion in other taxes and fees were created on rental cars, cigars, beer, wine, and internet sales.
The budget gives the Empire State the worst-ranked business tax climate in the nation - stealing the number one spot away from rival New Jersey. Not surprisingly, the Empire Center and Beacon Hill Institute have found that the budget will cost the state over 15,500 private sector jobs. Over the past ten years, spending in New York has increased a disturbing 39%!
So what is the result when politicians continue to burden the taxpayers and increase the giveaways to other voters? The taxpayer move away! 1 of every 7 taxpayers (1.1 million people) have moved out of NYC and 1.5 million people statewide have left over the last 8 years. This is the largest migration out-of-state in the country. An incredible 4.3 Billion dollars was lost in government revenue in just one year (2006-2007) due to people moving away. Not surprisingly, the most popular destination for the people fleeing NY is Florida, which has ZERO personal income tax.
It seems so obvious that, in order to have a prosperous society, you must keep taxes low to promote work, business, spending, innovation, etc. The wonderful thing about this country is we have states that have control over their own laws. So when a state like NY decides to make disastrous tax policies, people can simply move to a different state. There is competition and rewards and punishments that keep the states in check. But what happens when the entire country increases spending and taxes and overburdens the taxpayers? Will people move to other countries or stay put? I guess we will see over the next several years, the experiment is beginning now.
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