Daniel J. Mitchell

We know that countries suffer when taxes get too high, in part because investors, entrepreneurs, and other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On steroids.

We know that states also suffer when the tax burden becomes to onerous, leading to an exodus of jobs and investment.Jerry Brown Promised Land California andIllinois are case studies of this self-destructive practice.

But it’s especially foolish for state governments to over-tax because it’s relatively easy to move from one state to another. Escaping a high-tax nation, by contrast, is a much costlier step and some governments impose quasi-totalitarian barriers to emigration.

Well, if states are foolish for imposing excessive taxation, then local governments that do the same thing are downright suicidal. It hardly requires any effort to move to another neighborhood on the other side of a city’s borders.

That’s why Detroit was doomed to failure. It’s why California cities are going bankrupt. And it explains why I’m now very bearish about New York City.

That’s because the voters of the Big Apple just voted for a Mayor who thinks class-warfare tax policy is the right approach.


Daniel J. Mitchell

Daniel J. Mitchell is a top expert on tax reform and supply-side tax policy at the Cato Institute.
TOWNHALL FINANCE DAILY

Get the best of Townhall Finance Daily delivered straight to your inbox

Follow Townhall Finance!