Income and investment, which both grow the economy, flow into areas with low taxes and low regulation. As Investors’ Business Daily points out, states that have lost billions in income have done so because companies are moving to states with more pro-business policies.
New York, California, and Illinois, which lost $45.6 billion, $29.5 billion, and $20.4 billion respectively, have the three worst business climates in the country. George Mason University’s Mercatus Center ranks New York 50th in tax freedom, while California is 50th in burdensome regulation.
Many of the businesses that leave these states head to Florida, Arizona, and Texas—three states with lower taxes, fewer regulations, and overall better business climates. They thereby promote business growth and innovation—just the thing we need to get this country back on track. Just imagine what would happen if all 50 states followed the lead of Florida, Arizona, and Texas.