Arthur Laffer of Laffer Associates and Stephen Moore of the Wall Street Journal recently released a study they did for the American Legislative Exchange Council (ALEC). The study was reported in the Opinion section of the Wall Street Journal on Monday, December 10, 2007. Their study looked at the migration patters of Americans across the United States and what factors motivated human capital to move into a state. (In 2006, an estimated 8 million Americans moved from one state to another.) The study found that:
- The winning states for having human capital moving into them were characterized by having the lowest taxes, lowest spending, and lowest regulatory burden.
- The biggest losers were mostly located in the Northeast and Midwest.
- States with the highest income tax rates (NY and CA) were significantly outperformed by the 9 states with no income tax (AK, FL, NV, NH, SD, TN, TX, WA, and WY).
- States with "Right to Work" laws that prevent workers from being compelled to or required to join unions have higher rates of employment growth then states that do not.
- Five of the states near the bottom of the competitiveness ratings (IL, MD, MI, NJ, and WI) have enacted major tax increases in the last 2 years.
- Anti-growth taxes and spending policies not only lose human capital, but their governments also lose tax revenues when house values fall (causing a property tax decrease), tax base decreases (fewer taxpayers), and business leaving the state (fewer corporate tax payers). The result is increased unemployment, less investment in the state, and less money for schools, roads, and infrastructure, which hurts every resident of the state, including the poor.