Ortiz: Congress’s Gift to Blue-State Taxpayers

Alfredo Ortiz writes in the Wall Street Journal the new cap on deductions for state taxes created by congress in its tax reform legislation will serve to further shrink the populations of blue states that assess disproportionately high tax rates:

The great American migration out of high-tax states like New York and Illinois may be about to accelerate. The tax reform enacted last month caps the deduction for state and local taxes, known as SALT, at $10,000. This means millions of people will finally feel the full tax burden imposed by state and local politicians. When the SALT shield shrinks, so may people’s willingness to put up with these high taxes.

Such states already are losing population, and new Census Bureau data—released the same day tax reform passed the House and Senate—shows the continued migration. Of the seven states that grew the fastest between July 1, 2016, and July 1, 2017, four (Nevada, Washington, Florida and Texas) have no income tax, and the other three (Idaho, Utah and Arizona) have low taxes.

On the flip side, high-tax states like New York, New Jersey, Connecticut, Illinois and Rhode Island either lost residents or stagnated. Pennsylvania quietly became the fifth-most-populous state in the nation, displacing Illinois.