My take-away from this excellent piece by Joel Kotkin is that keeping more of your money matters. In other words, state taxes matter. Look at the magnetic pulling power of the three power states in the sun belt with no income taxes: Texas, Tennessee, and Florida. It turns out state lines can be re-drawn with the help of overbearing government excess. Because the new California is Texas and Tennessee, and the new New York/New England is Florida. Money travels to where it’s treated well. Just don’t tell the politicians. Kotkin writes in Forbes: Among the 71 largest metro areas, the biggest … [Read more...]

If you have been following my writing for any length of time, you'll know that I have been loudly and regularly sounding the alarm bell on the pension systems of America's cities and states. Here is a sampling of the pieces I have written on the subject: Pensions are Still Hiding from the Truth Dangerous Rules Make American Pensions Riskier Pensions Should be Fearful Pensions: Left on the Hook will be the Taxpayer Pensions in a Load of Trouble Today, Sarah Krouse reports for The Wall Street Journal that the pension hole in the United States for cities and states is the size … [Read more...]

President Trump has a golden opportunity for a second round of tax cuts by indexing capital gains for inflation. I can’t tell you how many times investors have wanted to make their portfolio more conservative but did not because of onerous capital gains. In other words, they kept more money in stocks, against their more prudent instincts, simply to avoid cap gains. This is how serious money is lost as witnessed in the markets twice so far this century circa 2000 and 2008. Kimberley Strassel of the WSJ explains how Trump could cut taxes with the stroke of a pen: What if President Trump had the … [Read more...]

It turns out that one of the keys to business success is lowering costs. That doesn't just mean for raw materials, but also for government imposed costs like taxation. The places doing the best job of lowering those taxes and attracting more business are red states like Texas. In The Wall Street Journal, James Freeman explains how one private equity firm is making money moving software firms from high tax states to low tax states like Texas. Yesterday I told you that CNBC had classified Texas as the best state for business. This is an example of what makes that so. Freeman calls it the … [Read more...]

Despite the allure of Silicon Valley, Hollywood and it's natural beauty, California has succeeded in driving away a "small but statistically significant percentage of high-income residents after voters approved Proposition 30." If you don't remember, Prop 30 was a ballot measure Californians approved in 2012 raising taxes on high income earners. The measure turned what had been a net-in migration of high income earners to California into what is now a net-out migration. Kathleen Pender explains in The San Francisco Chronicle: For singles, Prop. 30 raised the rate by one percentage point on … [Read more...]

  Despite a rising Fed funds rate and increasing inflation fears, rates on long term Treasuries have been coming down. Ben Eisen and Daniel Kruger report in The Wall Street Journal that some of the reason rates are falling is regulation-induced buying. Big companies are buying now to achieve a tax benefit coming as a result of the 2017 tax reform. They are funding pension plans now to receive the tax benefit they would have achieved under the 35% corporate tax regime, but will still only pay the 21% reformed rate. Eisen and Kruger write: S&P 500 companies are contributing … [Read more...]

On this site, I regularly highlight the good and bad of states' tax structure (read here, here, here, here, and here for starters). I want business owners, investors and retirees to have the best information possible in order to make their decisions about where to operate, live, and retire. Now, The Tax Foundation has released an update on state tax changes set to take effect on July 1. Some of these changes could be consequential to your income, purchasing power, or business operation. Take a look and see if any of these changes will affect you. From Morgan Scarboro and David Raymond at … [Read more...]

Today the Supreme Court has decided states are allowed to collect taxes from online retailers. Ten states already have laws requiring out of state sellers to notify buyers of taxes owed and to inform states of unpaid sales taxes. Retailers opposed the laws on the grounds that they had no presence in the states where taxes were being levied. In a 1992 decision, the Supreme Court ruled that companies with no physical presence in a state didn't need to collect that state's sales taxes. But now that online sales account for 10% of shopping, the old rule doesn't work anymore. The change in … [Read more...]

Whether Las Vegas real estate is in a bubble or not--this article leans towards not—Californians are finding greener pastures away from Gov. Brown’s reckless policies. As I’ve noted in the past, the direction of individual states is a geographical portrait of right vs. left (wrong) ideologies. Eli Segall writes from the Las Vegas Review-Journal: Las Vegas home prices are rising at one of the fastest clips in the country, with builders fetching record dollar amounts and resale values approaching prior highs. The growth is so fast that, according to a new report, prices here are the most … [Read more...]

I keep a regular eye on the way states treat their citizens. I regularly warn readers here to avoid those states papering over their structural problems with higher taxes and freedom-restricting regulations. At the same time I applaud those states where entrepreneurs and businesses are rewarded for their hard work and innovation with lower taxes and greater liberty. One thing that is upsetting to me and probably to most Americans is when a state uses its tax dollars to reward a specific group. Picking winners is not in a state's best interest, nor is it good for that state's citizens. … [Read more...]