Florida Plates

Minnesotans, The Frozen Chosen, celebrate a high quality of life and boast once people move here they never move away. That stickiness is a mystery to others around the nation, especially when viewing our winter weather forecasts in January and February from points even just a click or two South of here.

Residents and business owners have tolertated a fairly high cost of doing business in deference to that quality of life.

As our population ages however, and as our tax-and-spend lawmakers leverage their majority, we will find ourselves waxing nostalgically about the good old days when our economy was strong and diversified, our schools were world-class and our cities safe and clean.

Ever wonder why you see so many Florida license plates on the backs of Cadillac, Mercedes Benz and Lexus cars in Minnesota?

Soak the Rich, Lose the Rich

With states facing nearly $100 billion in combined budget deficits this year, we’re seeing more governors than ever proposing the Barack Obama solution to balancing the budget: Soak the rich. Lawmakers in California, Connecticut, Delaware, Illinois, Minnesota, New Jersey, New York and Oregon want to raise income tax rates on the top 1% or 2% or 5% of their citizens. New Illinois Gov. Patrick Quinn wants a 50% increase in the income tax rate on the wealthy because this is the “fair” way to close his state’s gaping deficit.

A good many wealthy Minnesotans have figured out how to live in Florida – and more recently in my professional experience, South Dakota and Arizona – 181 days of the year, and if we raise taxes again, I’d say a good many more are going to give it a go.

…from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Examining data from a 2008 Princeton study on the New Jersey tax hike on the wealthy, we found that there were 4,000 missing half-millionaires in New Jersey after that tax took effect. New Jersey now has one of the largest budget deficits in the nation.

Have you seen those commercials and heard those radio ads here that equate the Governor’s directive to not raise taxes with the suffering of students and teachers and firefighters and law enforcement?

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states “race to the bottom” and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

They’re wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation — even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Texas, recently threatening secession, seems to have the right formula.

Texas created more new jobs in 2008 than all other 49 states combined. And Texas is the only state other than Georgia and North Dakota that is cutting taxes this year.

The Texas economic model makes a whole lot more sense than the New Jersey model, and we hope the politicians in California, Delaware, Illinois, Minnesota [emphasis mine-JR] and New York realize this before it’s too late.

Given the current economy and already-high taxes, we may be near a tipping point where raising taxes now could accelerate an exodus of the wealthy and more importantly, business owners, taking their jobs and consumption with them.

Surely New Jersey didn’t think they would ever be a cautionary tale. Let’s not let Minnesota be the next.

4 thoughts on “Florida Plates

  1. For several years my Mom and Dad had a 3 season place in Sarasota (my sister and her husband live there). They had a town house in Maple Grove. My sistyer and I would take turns driving them up and back in the Spring and Fall. They finally packed it in and bought a nice little house down there.
    I’ve got two kids. One is 22, and almost ready to move out. The other is 16 and a sophomore. Three more years and I will most likely become a Floridian.

  2. Good choice in not educating your kids in FL. Terrible schools there, but a tolerable place in most other respects.

  3. “Three more years and I will most likely become a Floridian. ”

    I’m headed for Northern Arizona. Sedona, or something in the area. I may keep my cabin up north, but I won’t spend more than 90 days a year there.

  4. I usually see Il plates on Caddy’s. They generally have curb feelers and a Crown Royal crown in back.

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