Does Place Matter if Taxes Are Low?
In Meredith Whitney’s new book, the Fate of the States, she predicts a resurgence of economic growth in the Midwest. This growth she explains would be due to these state’s low tax burden, limited government restrictions and other incentives. To prove her case she highlights the percentage of growth in states such as Texas, Florida and North Carolina. Next City’s Brady Dale provides a more pragmatic view towards the author’s claims in his review of the book. Read more at Next City:
For example, in one chapter Whitney attempts to argue that growth is robust in her favored states while it has been hobbled by shortsighted policy in economic deadweights such as New York and California. The growth rates she gives are for Louisiana (16 percent), North Dakota (27 percent) and Iowa and Nebraska (11 percent for both).
It sounds attractive. A young person might like a shot at a piece of a 10-plus percent growth rate, right?
Hold on. Does a worker want a part of a percentage or a part of actual money? Because these numbers look a bit different. Let’s turn those rates-of-growth into real dollar values, using data from the U.S. Commerce’ Department’s Bureau of Economic Analysis. California’s growth was very bad in that time, no question. North Dakota, Iowa and Nebraska each made some nice money, ranging from $8 billion to $12 billion. Louisiana did better, at about $23 billion in growth. None made as good a showing as New York, however, which clocked in at $89 billion in growth, from the height of the recession to deep into the recovery.