Read Allan Sloan’s latest Fortune column, and you’ll note that his politics differ from those of John Locke Foundation President John Hood.
Still, Sloan’s argument that New York and New Jersey can’t fill state budget gaps with tax increases brings to mind Hood’s argument that “Carolina isn’t a castle.”
It’s the rational way — and probably the right way — for Cuomo and Christie to behave. Given the intense state-to-state competition for jobs and tax money, Cuomo and Christie don’t have much of a choice.
As you can see from the pending congressional redistricting, high-tax, high-cost states like New York and New Jersey are losing seats because they’re growing far more slowly than the national average, while low-cost, low-tax places like Texas and Florida are gaining seats because they’re growing faster. …
… You may not like the idea of closing state budget gaps without asking for more money from high-income people (including me) who benefited directly or indirectly from the federal bailout. Some days I don’t like that idea either. But let’s get real. Raising income taxes in a world in which people and capital are ultra-mobile is a dangerous game for any state. Cuomo and Christie are wise not to be playing it.
