• Tag Archives taxes
  • Americans Fled High-Tax States in 2021, New Analysis Shows

    For many people, the start of a new year is an opportunity for genuine self-reflection. If Democratic lawmakers take an honest look at 2021, the inescapable conclusion is that voters chose with their feet — and rejected high taxes.

    A new analysis from the right-leaning Tax Foundation reaches this conclusion. Analyst Jared Walczak broke down U.S. Census Bureau data and reports that while the United States overall saw only minor population growth in 2021, there were very significant shifts in state populations as people relocated.

    The five states (counting Washington, D.C., for analysis purposes) that lost the most residents on net were Washington, D.C., New York, Illinois, Hawaii, and California. Meanwhile, the states that saw the biggest net gains in population were Idaho, Utah, Montana, Arizona, South Carolina, Delaware, Texas, Nevada, Florida, and North Carolina.

    Notice a pattern? The states with population losses tend to be higher-tax states, while those that saw an influx of new residents tend to be lower-tax states.

    This isn’t just intuition — Walczak ran the numbers. Analyzing data covering April 2020 to July 2021 and including the district, the analysis concludes that in the bottom third of states (the ones with the biggest population declines), the average combined state and local top tax rate is 7.3%. In stark contrast, in the top-third of states (the ones with the most population growth), the combined tax rate is just 3.5%.

    The trend here is clear as day. When voters put their money on the line, they chose lower-tax states and rejected high-tax, blue-state policies.

    “People move for many reasons,” Walczak said. “Sometimes taxes are expressly part of the calculation. Often they play an indirect role by contributing to a broadly favorable economic environment. And sometimes, of course, they play little or no role. The Census data and these industry studies cannot tell us exactly why each person moved, but there is no denying a very strong correlation between low-tax, low-cost states and population growth.”

    Don’t be surprised if some progressive politicians, who love to spend (and waste) our money, try to deny it anyway and stick with their bad tax policies. But the truth is clear to any honest observer. Yet, there’s more than just a lesson on tax policy here.

    This trend toward lower taxes and freer economies reminds us why the U.S. system of federalism — decentralized governance — is so effective and worth preserving. When Americans can choose between different policies at the state and local level, more people get to live under policies that embody their values. And, more importantly, the best ideas win out over time.

    When the federal government enacts one-size-fits-all policies on the entire country, this opportunity for customization and experimentation is lost. Remember that next time you see politicians on the national stage who want to override state sovereignty and push their ideas on the entire country.

    This article originally appeared in the Washington Examiner. 


    Brad Polumbo

    Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and Policy Correspondent at the Foundation for Economic Education.

    This article was originally published on FEE.org. Read the original article.


  • ‘Freeloading’ Elon Musk to Pay Largest Federal Tax Bill in History, an Estimated $8.3 Billion

    Elon Musk made a bold claim on Twitter on Tuesday. The Tesla founder said he would “pay more taxes than any American in history this year.”

    Is the claim true? Only the IRS knows for certain who the largest taxpayer in US history is, but Forbes says Musk appears to be right.

    “The eccentric billionaire (and the world’s richest person) likely owes the federal government at least $8.3 billion for 2021,” Forbes reports.

    Business Insider projects Musk’s tax bill is even higher when state taxes are included.

    “Taxes on his stock, nearly a billion in Net Investment Income Tax, and the billions he likely owes California could add up to about $12 billion in total,” report Jason Lalljee and Andy Kiersz.

    CNBC, meanwhile, figured Musk’s total tax bill was even higher—$15 billion.

    The bulk of Musk’s tax bill stems from the nearly $13 billion in Tesla stock sold as of December 13, which is even larger than the record $10.2 billion worth of Amazon stock Jeff Bezos sold last year.

    Whatever Musk’s tax bill ends up being, it’s worth examining the context of his claim. Musk was not bragging that he had the largest tax bill in history; on the contrary, he was responding to Sen. Elizabeth Warren, who—somewhat unfathomably—lashed out at Musk for not paying his fair share of taxes.

    “Let’s change the rigged tax code so The Person of the Year will actually pay taxes and stop freeloading off everyone else,” Warren tweeted.

    You read that correctly. Warren, the progressive lawmaker from Massachusetts, called Musk a freeloader. It’s possible that Warren didn’t know that Musk is set to pay more in taxes than any American—perhaps human being—in history, but it’s more likely she simply does not care and is comfortable peddling the fiction that Musk isn’t paying taxes. Warren made this clear in subsequent remarks after Musk had responded to the Senator.

    “He’s the richest guy in the world, and he just doesn’t want to pay taxes,” Warren said. “That’s what it’s all about for me.”

    She continued:

    “I gotta say, on behalf of every school teacher who pays taxes, on behalf of every waitress who pays taxes, on behalf of every American citizen who goes out and works for a living and pays taxes …that’s just fundamentally wrong. We have a broken tax system that lets Elon Musk freeload off everyone else, and it needs to stop.”

    Warren’s claim that Musk is a “freeloader” is preposterous, of course. Taking the lowest estimate on what Musk is expected to pay, he’ll cough up more in taxes than the entire state of Massachusetts collected in sales and use taxes through the first half of 2021—from its 7 million residents.

    Moreover, unlike Warren, who collects a salary from the government, Musk earned much of his wealth by creating value. Tesla employs nearly 80,000 people who’ve built no fewer than 623,000 energy-efficient cars in 2021 alone. Its market cap is nearly $1 trillion, which has made untold numbers of Tesla employees and shareholders wealthy. Warren, on the other hand, creates nothing. Every dollar of her $174,000 salary—and the money she pays her staff with—comes from funds confiscated from taxpayers. Every dollar she authorizes to be spent was taken from someone else who earned it.

    Musk’s success should be applauded, but instead Warren—the true freeloader—accuses him of “freeloading” and believes he should be paying more.

    What really appears to bother Warren is that Musk has so much. In other words, it’s a politics rooted in envy.

    Envy is considered one of the Seven Deadly Sins, and for good reason. It’s a corrosive disposition that harms both individuals and societies. The celebrated philosopher Immanuel Kant described envy as,

    “…a propensity to view the well-being of others with distress, even though it does not detract from one’s own. [It is] a reluctance to see our own well-being overshadowed by another’s because the standard we use to see how well off we are is not the intrinsic worth of our own well-being but how it compares with that of others. [It] aims, at least in terms of one’s wishes, at destroying others’ good fortune.”

    The pre-Socratic philosopher Democritus (c. 460 BC – c. 370 BC)—in a wonderfully libertarian quote—once warned of the danger of envy and purpose of the law.

    “[Just] laws would not prevent each man from living according to his inclination, unless individuals harmed each other; for envy creates the beginning of strife,” he wrote.

    Strife is precisely what Warren and those who share her philosophy are sowing, and it’s clear she and others view Musk’s good fortune with distress. If that’s not envy, I don’t know what is.

    Jon Miltimore


    Jon Miltimore

    Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune.

    Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times.

    This article was originally published on FEE.org. Read the original article.