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The love of taxes is the root of unhappiness: update
When confronted with the argument that higher taxes = unhappiness, we wonder, even while remaining sympathetic to the point of view, whether or not it runs vice-versa, or at least cuts both ways: unhappy people like to raise taxes.
Another factor in the Southeast’s attractive growth potential – and one clearly related to taxes – is lower state debt burdens. Some state governments, when faced with crushing budget deficits, respond with growth-stalling tax increases on the businesses that operate in their states. (The problem worsens dramatically when one considers many states’ unfunded pension liabilities.)
Two states whose budget woes have garnered recent headlines include Illinois, which pushed through a 45% increase in corporate taxes – apparently triggering an exodus; and California, which is on the verge of running out of money – again.
Some states, like the aforementioned California, respond in other “desperate ways” which further undermine investor confidence and entrepreneurial spirits: accounting gimmicks, delayed payments, issuing IOUs, or even more borrowing. As we’ve written before, only one non-Southeastern state – Nebraska – has a lower debt-to-GDP ratio than FL (5th), GA (4th), TN (2nd), NC (3rd), TX and VA (tied for 6th).