The latest Census Bureau data on population changes in America should have been a wakeup call to lawmakers in blue states and cities. The Census data provides even further evidence that “soak the rich” tax policies have incited a blue- states meltdown. California, New York and Illinois all lost the most population last year. These states have nearly lost a combined 5 million people over the last decade. California and New York could both lose another three congressional seats by the end of the decade, and Illinois another two.

Did I mention that these are the three states with the highest taxes? Is this just a coincidence?

Dems in blue- state America think so, and they’re betting the farm and the Empire State Building on a “sock it to the rich” strategy driven by progressive groups to make their tax systems “fairer.” More likely this will dig a deeper hole in their financial ditch. The middle class will pick up the tab.

This year at least seven blue states are implementing or pursuing even higher tax rates on the wealth or the income of the top 1% of earners despite the evidence that these policies are detrimental to their citizens. One such state is Washington. Once an importer of talent and brainpower because of its no income tax status, the Dems who control all the levers of power in Seattle just enshrined a 7.5% capital gains tax and the Democratic Supreme Court strangely ruled it was constitutional. This is one of the highest taxes on the sale of assets in the country.

Now state Sen. Noel Frame wants a 1% annual tax on financial intangible assets – such as cash, stocks and bonds – over $250 million. And then they wonder why one of the world’s richest human beings, Jeff Bezos, has moved to south Florida.

In another progressive state, Vermont, Dems have just proposed yet another tax rate hike that would raise their top income tax rate to more than 8%. This would bump Vermont up to the 5th highest rate in the country. Pretty soon Ben and Jerry will be the only rich people left in the state — and don’t be surprised if they move out too.

Meanwhile, Maryland Dems are pushing a “millionaire tax” ($750,000 in income and above), a capital tax and a new corporate tax.

California just raised its top income tax rate to the highest in the USA— from 13.3% to 14.4%. The Golden State just moved past New York to reclaim the income tax top spot. They must be so proud. The Dems in Sacramento also expanded the state’s 1.1% payroll tax. 

Meanwhile, Jonathan Williams, a fiscal analyst at ALEC – an association of more than 2,000 conservative state legislators reports that “Red States Are Slashing Tax Rates. “He finds that in 2023 nine states — Arkansas, Connecticut, Indiana, Kentucky, Montana, Nebraska, North Dakota, Utah and West Virginia — have enacted policies to reduce personal or corporate income tax rates.  Oklahoma is set to cut rates this year to as low as 2%. Several of these states now have flat taxes, not multiple tier “progressive” rates.  Every state on this list is a red state except Connecticut.

What does all this mean?  Two things. First, the blue- state deep thinkers are so smart they can’t see that their “progressive” tax systems are bleeding their states dry. Or else they don’t care.  Second, red states are redefining the future of America. Low taxes, school choice, worker freedom, welfare reform, pro-drilling energy policies are attracting millions of Fed-up blue state businesses, workers and investors. Once upon a time it was the northeast that was the financial and industrial capital of the world. Now Miami, Nashville, Dallas, Austin, Charlotte, Tampa and Salt Lake City are the hot destinations. The southeast now produces more GDP than the northeast.

I call it a blue-state dysphoria. They must change their ways or die. So far, their political leaders are choosing the latter course.

Stephen Moore on January 7, 2024