Michigan and Taxes

From op-ed of WSJournal on Feb 12th:

"A record eight million Americans -- some 20,000 people every day -- relocated to another state last year. So where are these families headed and why? The general picture is this: Americans are continuing to flee the Northeast and Midwest, while the leading destinations continue to be Southern and Western states.

The United Van Lines study finds that the biggest population loser last year was Michigan, where two families moved out of the state for every new family that moved in. Americans are also fleeing New York, New Jersey, Ohio, Pennsylvania and Illinois. Without interviewing the departed, it's impossible to know the reasons for this outward migration. No doubt overall economic prospects, climate, quality of life and housing prices play a role.

But one reason to conclude that taxes are also a motivator is because the eight states without an income tax are stealing talent from other states. They are Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, and each one gained in net domestic migrants. Each one except Florida -- which has sky-high property taxes on new homesteaders -- also ranked in the top 12 of destination states. The nearby table ranks the top five destination and departure states.

Politicians who think taxes don't matter might want to explain the Dakotas. North Dakota ranked second worst in out-migration last year, while South Dakota ranked in the top 10 as a destination. The two are similar in most regards, with one large difference: North Dakota has an income tax and South Dakota doesn't.

Here's another example. The only Pacific Coast state to lose migrant population in 2007 was California, which has the highest state income tax in the nation. This is the continuation of a dismal 10-year performance with nearly one and a half million Golden Staters leaving what was once the premier destination state in America.

Meanwhile, next door, Nevada was second among the states in new families -- and a big percentage of the new arrivals are Californians. Nevada has no income tax. High income Californians can buy a house in Las Vegas for the amount of money they save in three or four years by not paying California income taxes.

Now we have GM offering ALL 74,000 existing UAW members a buyout package, will those that still reside in Michigan want to stay or "head south"?
Or find someplace nice where they can stretch that package a bit further.

Michigan will continue with a gut wrenching series of changes, and none of us are sure of what our future will look like, but we have abundant water, a pleasant natural enviroment and good location within North America.
We have a skilled manufacturing workforce and great institutions of higher learning.
But we need to restructure the tax base, shift more to the consumption side from the income side.

Let the tourist and seasonal residents pay more of the burden.
Let those who live and work here pay less.
Encourage jobs, business and retirees to stay.