Blue Dysphoria: Dem States Just Can't Stop Taxing

Stephen Moore: Pretty soon Ben and Jerry will be the only rich people left in Vermont

The latest Census Bureau data on population changes in America should have been a wake-up call to lawmakers in blue states and cities. The Census data provide even further evidence that "soak the rich" tax policies have incited a blue-state 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?

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Is this just a coincidence?

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Democratic governors evidently think so. This year, seven blue states are pursuing even higher tax rates on 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 Olympia just enshrined a 7% capital gains tax, and the Democratic Washington Supreme Court strangely ruled it is constitutional. This is one of the highest taxes on the sale of assets in the country.

State Sen. Noel Frame, D-Seattle, 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 Vermont, Dems have just proposed raising their top income tax rate to more than 8%. 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 U.S. – 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 to include all income earners. The tax was previously applicable only to those making up to around $153,000 annually.

Meanwhile, Jonathan Williams, the chief economist at the American Legislative Exchange Council – an association of more than 2,000 conservative state legislators – reports that eight red states are cutting income taxes, including Arkansas, Indiana, Kentucky, Montana, Nebraska, North Dakota, Utah and West Virginia. 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? The blue-state deep thinkers can't see that their "progressive" tax systems are bleeding their states dry. Or they don't care.

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.

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