The Wall Street Journal has an interesting story about how Blue states are raising taxes and spending pretty dramatically while Red States are holding the line.
My personal opinion is that these Blue States are making a mistake. There has been a slow seepage of high-income people and businesses from Blue States due to high taxes. Raising them even more is likely to drive off more.
But, on the other side of the coin, many people are glad to pay more in taxes when accompanied by better government services. Unfortunately, many of the Blue States, such as California, have a history of squandering tax money.
What's the right choice? I have an opinion but I don't know for sure. But the beauty of federalism is that different states can do different things and hopefully learn from each other's mistakes. If higher taxes and spending -- presumably accompanied by better infrastructure and education -- end up attracting new businesses we'll know that the Blue State strategy is best. If the Blue States continue to hemorrhage jobs and taxpayers we'll know they have made a mistake. If Red States continue to slowly attract business and taxpayers we'll know they've done it right.
I think it worthy of note that many Blue State residents simply would never more to a Red State no matter how high their taxes were. Most people from Southern California or Massachusetts simply are not going to be happy living in Mississippi or Alabama. They might like Naples, Fla., though. People aren't going to pack up and move overnight. This is a decade-by-decade process.
What we have is federalism at its finest. Different states adopting dramatically different policies. Not only does it give American citizens more choices, but as a state we can look around at what works and doesn't work elsewhere and act accordingly.
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