A couple of recent articles have once more made the case, at least implicitly, for political decentralization as the only viable path which will begin to solve the seemingly insurmountable political, economic, and social crises which the Western world now faces.
In the last few months, over 3,000 millionaires have fled the hopelessly corrupt and bankrupt state of Illinois. When asked, 47% of Illinoisans would like to leave the state which, over the last decade, has seen over a half million of its residents flee. Naturally, this exodus has exacerbated the Land of Lincoln’s financial straits to catastrophic levels.*
A report published by the American Legislative Exchange Council predicted that the tax flight which is occurring in Illinois will similarly take place in the coming years in high-tax blue states such as California and New York. The 2017 Trump tax reform will accelerate this process since under the new legislation the amount of state income tax that can be deducted on federal tax returns has been capped at $10,000 per family. The authors of the report wrote: “. . . high [income] earners in places with hefty income taxes – not just California and New York, but also Minnesota and New Jersey – will bear more of the true cost of their state government.”**
The not too subtle consequences of the new tax code will mean an even greater exodus of taxpayers out of blue states which will shrink state revenues even further and create job losses across the board.
While those who want to escape the crushing burden of individual state taxation and regulation, if they have the means and desire to do so, can move to more favorable climes, no such option exists (except the drastic step of expatriation) to escape federal tyranny.
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