Paul L. Caron

Thursday, June 20, 2019

Low-Tax States Are Adding Jobs 80% Faster Than High-Tax States Due To GOP Tax Law

Forbes, Low-Tax States Are Adding Jobs 80% Faster Than High-Tax States Due To Trump's Tax Cut & SALT Cap:

Job growth has been running 80% stronger in low-tax states than in high-tax states since the passage of the Tax Cuts and Jobs Act of 2017 in December 2017. Understanding why holds important lessons for policy, economics, and politics.


Since taxpayers in 27 states, led by Texas and Florida (neither of which has a state income tax), have average SALT deductions under the $10,000 cap, it’s unlikely there will be much of a political appetite in Congress to restore the full federal subsidy for high-tax states. Rather, if political leaders in states accustomed to taxing and spending far more than their more frugal peers wish to participate in higher rates of job creation, they should reform their own fiscal houses, rather than expect their neighbors to subsidize their high-spending ways.

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Unemployed: P.S. you didn't strike a nerve, as you originally claimed, just made my willful ignorance radar go off. When I read a totally uninformed opinion such as yours regarding a local real estate market I know quite well, I feel the need to point it out.

You said: "Per a CNBC analysis more than 6 in 10 renters in that area toss more than 30% of their income at rent; 35% are paying more than HALF their income in rent. Silicon Valley and Boston don't even appear on CNBC's list."

The facts, from the San Jose Mercury news. It's only gotten worse since this article was published:

"In the San Jose metro area, 45.1% of all renter households are 'rent burdened,' meaning that more than 30% of their pre-tax income goes to paying monthly rent. But the burden increases for renter households in the San Jose metro area earning less than $50,000. Among those households, 83% are 'rent burdened', and 56.5% are 'severely rent burdened,' meaning that housing eats up more than 50 percent of their income."

Now, I'm quite certain that you'll ignore all of these facts or continue to dissemble what you originally stated. After all, that's your standard MO around here. Not to mention instances when YOU'VE been asked to support certain ridiculous claims you've made with actual evidence. For example, predatory lending policies for private student loans. Still waiting for you to cough up a single example from before the recession.

In the meantime, keep equivocating and spinning on topics you have little to no knowledge about. It's quite amusing...

Posted by: MM | Jul 1, 2019 6:34:40 PM

Unemployed: "Comment?"

Many aren't even living in the same COUNTY where they work, let alone city, which is why their employers have offered a company bus in some cases.

You didn't even bother to read the article, did you?

Posted by: MM | Jul 1, 2019 7:26:56 AM

MM, of course your article on Silicon Valley neither contradicts nor really touches upon my point, which is that thanks to southern salary scales metro Miami is, by some metrics, the most unaffordable city in the US. And per the figures I saw, while SV is expensive those Facebook/Apple/Google/etc workers aren't paying half or more of their income in rent. Comment?

Posted by: Unemployed Northeastern | Jun 25, 2019 8:03:40 AM

Boring: "Actually, the blue states are subsidizing the red states."

Actually, no such subsidization is happening, and you've changed the meaning of the word to suit your argument, which is OT by the way.

Since the federal government spends more than it receives in tax revenue, almost every state receives more in federal expenditures than the residents of those states pay in to the federal government:

Only a handful of states don't at least breakeven.

And for the record, state governments, be they red or blue do NOT send tax revenue to the federal government. Individuals do that, so when you talk about who's literally subsidizing whom, it's predominantly wealthy individuals subsidizing everyone else, wherever they may be.

Posted by: MM | Jun 25, 2019 7:41:45 AM

Unemployed: "Silicon Valley and Boston don't even appear on CNBC's list."

Perhaps, sir, you ought to do your homework on local markets before you asset some sort of knowledge of them:

"Silicon Valley is so expensive that even Facebook and Apple employees can't afford to live near the office"

They, like most people who work in the Bay Area, CA, of which I have personal experience, have to spend a lot of time commuting to get to work, often from a different county.


Posted by: MM | Jun 24, 2019 7:37:16 AM

An additional aspect to this article that no one's mentioned before is the idiotic implication (in "restore the full federal subsidy for high-tax states") that the low-tax states are subsidizing their higher-tax peers. Actually, the blue states are subsidizing the red states.
The actual subsidy is probably greater than this because the high-education blue states give people degrees that they can then take to low-education red states.

Posted by: Boring grammar nerd. | Jun 23, 2019 4:34:50 PM

MM -- Folks like UN don't care about the average Californian, or the average anyone. They think the world should offer high-paying jobs to everyone, regardless of ability or skill. Fail that it is more noble to be unemployed.

Posted by: Mike Petrik | Jun 23, 2019 1:59:18 PM

Unemployed: High-paying tech jobs in Silicon Valley may very well be rewarding.

Meanwhile, California has a 25% supplemental poverty rate, the second highest in the nation, behind Washington, DC. And the second highest cost of living, behind Hawaii. And the most uneducated adult population in the nation. And some of the worst air quality in the nation.

Should I go on? Because the more you examine the facts on the ground, the less rewarding it is for the average Californian.

Posted by: MM | Jun 21, 2019 2:10:30 PM

It seems I hit a nerve. Two things:

1) As this is a website run by a law professor that is primarily aimed at lawyers, it should be pointed out that Florida in particular... has no bar reciprocity whatsoever. If I practiced law for 50 years and moved to Florida they'd make me take the bar exam. Thousands in application fees & bar prep, months of study, all just to be able to apply for lawyering jobs: that's a major impediment for lawyers moving there (or any of the other 15 or so states with no reciprocity).

2) Most of the jobs action in Florida is in Miami-Lauderdale-Palm Beach, aka the metro area with the highest percentage of cost-burdened renters. Per a CNBC analysis more than 6 in 10 renters in that area toss more than 30% of their income at rent; 35% are paying more than HALF their income in rent. Silicon Valley and Boston don't even appear on CNBC's list.

Posted by: Unemployed Northeastern | Jun 21, 2019 10:58:27 AM

Unemployed Northeastern: I have been working in the Silicon Valley for 35 years. If you think that racism, discrimination, back stabbing, working 60 to 70 hours a week, making six figures and not able to rent an apartment because you cannot afford it so you live miles away from your job commute 4 hours per day in the worse traffic in the world is rewarding, stimulating and remunerative you must be crazy. Signed: Silicon Valley Brat.

Posted by: SiliconValleyBrat | Jun 21, 2019 8:00:53 AM

I think I see why you’re unemployed.

Posted by: Paul Schmidt | Jun 21, 2019 7:21:39 AM

I'm a software developer in Tampa, Florida. The tech jobs are booming here.

Posted by: Software Guy | Jun 21, 2019 6:53:57 AM

Those silly valley jobs pay so well the whole city is literally your living room (and bathroom).

Posted by: Suffering blue stater | Jun 21, 2019 6:44:54 AM

Silicon Valley? You mean where the wages allow you to afford housing in an RV illegally parked at Wal-Mart?

Silly Valley isn't adding jobs. Texas, OTOH......

Posted by: SDN | Jun 21, 2019 5:04:46 AM

Yeah, it's the Villages. And here in South Carolina, it's also Volvo, Boeing, a growing container port, lots of construction, sunny weather, and beaches and stuff. Unlike what you find in the northeast anymore. Move, Unemployed. Just leave your high taxy ideas behind.

Posted by: Geo | Jun 21, 2019 4:59:07 AM

Is that you, Paul Krugman?

Posted by: dr kill | Jun 21, 2019 4:57:44 AM

What you have to earn to live comfortably in Silicon Valley - min 150,000. What you have to earn to live comfortably in the Villages of Florida, 50,000. From what I can tell, living in Silicon Valley is extremely high stress. I think I might rather live in the Villages of Florida.

Posted by: senecagriggs | Jun 21, 2019 4:55:19 AM

Since when is scooping poop in San Francisco a rewarding, stimulating and remunerative job? On the other hand, you might be qualified. Anything else out there, you'll need an HB1 to qualify.

Posted by: Stilicho | Jun 21, 2019 4:33:41 AM

The graph doesn’t show the tax change having an effect. The slope of the two graphed lines appears to stay the same from when they originally diverge in the summer of 16. If the tax change was responsible, you’d expect a change in slope to one or more of the lines after December 17.

Posted by: Anonprof | Jun 20, 2019 5:13:53 PM

Causality is impossible to prove without access to a parallel universe.

Posted by: AMTbuff | Jun 20, 2019 3:32:53 PM

Yes, because I'm sure the jobs being added in The Villages, Florida, are just as rewarding, stimulating, and remunerative as the jobs added in Silicon Valley or Cambridge. Yup.

Posted by: Unemployed Northeastern | Jun 20, 2019 12:31:10 PM