Cal Thomas: Turning off the lights

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MYRNA BROWN, HOST: Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Myrna Brown.

MARY REICHARD, HOST: And I’m Mary Reichard.

Policies always have consequences. Some are good. Some are not. What looks like a good idea can unleash a whole bunch of unintended consequences.

WORLD commentator Cal Thomas says policies that raise taxes are a perfect example.

CAL THOMAS: The phrase about turning off the lights when one leaves someplace appears to have originated with two real estate agents in Seattle. It was 1971 and Boeing was laying off employees during an economic downturn. It was meant to be humorous, though the unemployed probably didn’t see it that way.

During the Arab oil boycott in 1973, Houston newspapers invoked the phrase as they sought to lure people from the North, which was suffering from high unemployment, fuel shortages and economic stagnation. Newspaper ads told of job openings with good salaries and benefits.

Now come the folks at Unleash Prosperity who have resurrected a form of the phrase. The group is a nonpartisan group focused on “educating policy makers and the public about government policies proven to maximize economic growth” They’ve placed billboard ads along major thoroughfares that say respectively: “New Jersey isn’t moving up. Families are moving out.” And “New Yorkers aren’t moving up. They’re moving out.” That would be to places like Texas and Florida where there are no state income taxes and life is perceived to be safer and less expensive.

Stephen Moore is co-founder of Unleash Prosperity and a former senior Trump economic adviser. He writes that the two states have lost a combined two and a half million residents. As shocking as that may be, those numbers pale in comparison to the financial impact of the population shift. Unleash Prosperity reports that “New York has lost roughly $111 billion dollars in income and New Jersey has lost $31 billion.” And that’s what leads them to say: “these states must change or the last person in the state will have to turn off the lights.”

A study published last year in the American Economic Journal: Economic Policy was billed as “the first-ever systematic analysis of 110 years of state income tax implementation throughout the United States.” It highlighted the consequences when taxpayers leave high tax states for states with lower or no state income taxes. The analysis looks at pre-World War II and post-World War II personal income tax impacts.

The state-level tax policies from 1900 to 2010 examined in the paper reveal that income tax adopting states increased revenue per capita by 12 percent to 17 percent. But those increases did not correspond to increases in total revenues for the government in monetary terms. This is because the introduction of state income taxes in the post-World War II era led to out-migration by wealthy Americans.

One of the study’s coauthors writes: “Personal income tax means a tax upon labor income.” It was a scheme to redistribute wealth. He goes on to say: “The idea was to provide services to poorer parts of the population and reduce inequality between low-income and high-income residents.”

Unfortunately, those who raise taxes fail to take human nature into account. People who have the resources also have the option of moving to more economically friendly locations. And many have. But like a Vietnam anti-war song says: “We’re waist deep in the big muddy and the big fool says to push on.” In this case it’s not an unpopular war, but debt and taxes, because most Democrat-run cities and states can’t live within the means they are given.

As a result, more people in New York City, New Jersey and other states with high taxes have their fingers on the light switch and their car engine is running.

I’m Cal Thomas.

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