Wow, I'm a real slacker as a blogger. I've been busy moving to California and haven't had a change to log in. When I just added the post about my comments to Marketplace, I didn't realize I hadn't posted since October. And I'm about to enter Tax Season and will be working 60+ hour weeks so I'm not sure how much I'll be able to get to this. Oh well. I was inspired while running to change the blog name to Free Markets and Good Beer, so I did it. Now I'll just try to keep adding interesting (to me, at least) thoughts as they come to me.
The move to California made me think about something. Dominant economic thought indicates that higher taxes will hamstring businesses and encourage them to go elsewhere. Yet upon moving to the Bay Area, I've moved to an area with much higher maximum tax rates than my former home of Missouri. Yet the Bay Area is a major center of commerce for our country and the source of much of its innovation. Now I could dismiss this as a result of the nice scenery and mild weather. But look at the country as a whole. Some states have no income tax at all: South Dakota, Nevada, Alaska, Wyoming... The only no-income-tax state that's a major center of industry is Texas, and that's easily explained by oil money and an abundance of refineries. On the other hand, New York and California are probably the two most important states for business and they also have among the highest tax burdens. If taxes made such a huge difference on business activity, should there be at least SOME correlation between state tax rates and the amount of business activity??