Another "great exodus" is in full swing as Americans continue to flee the high-tax blue cities in the north for Houston and other lower-tax areas across the south.
Middle-class families can't leave places like New York, Chicago and San Francisco fast enough to escape the high tax burden. More than one million people have moved out of the New York City market since 2010. California as a whole saw a net loss of 143,000 residents in 2016.
“Given the regulatory burden, restrictive zoning, environmental fees and everything else it boosts up the cost of housing in California, it was financially virtually impossible,” says Chuck DeVore, vice president of national initiatives at the Texas Public Policy Foundation, who transplanted his family from California several years ago.
Even the GOP tax bill can't offset repeals of state and local tax deductions.
“Most Americans are going to get a tax cut, even in the high-tax states, but if you're making a lot of money in a place like California or New York, that limitation to the SALT deduction will in fact result in a tax increase for you,” says DeVore.
DeVore says recent employment growth across the south is proof what blue cities are doing is not working.
“The employment growth, the rate of growth in the low-tax states in the first quarter of this year is double the employment growth in the high-tax states,” he says. “A lot of that has to do with the state and local tax deduction which has been limited to $10,000 per family.”