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There’s always something to howl about

Why are people in New York and Connecticut unhappy, while the folks in Louisiana and Tennessee are more satisfied with their lives? The obvious answer is the true one: Taxes and spending.

More from The Wall Street Journal: People in high-tax states are less satisfied with their lives than those in low-tax states.

Who knew?

That’s not a fair question. Everyone who can do math already knew this. But what’s interesting is that it points the way forward for all states, especially the ones currently losing their high-earning tax-slaves to less onerous tax-plantations: Cut taxes. Cut spending. Get rid of your kleptocratic union laws.

Or: In the words of John Galt, “Get the hell out of my way!”

The study suggests that quality of life heavily influences happiness. This may seem obvious, but until this study, social scientists have struggled to develop a model that supports this hypothesis. Now we know that people who say they’re satisfied with their lives aren’t just delusional or overly optimistic, and people who say they’re unsatisfied aren’t just pessimists. People have legitimate reasons to be happy or unhappy.

And well, high taxes seem to be a big reason — ostensibly an even bigger reason than weather given that California is one of the unhappiest states and inclement Louisiana is the happiest. Further, considering how much New York’s crime rate has dropped and schools have improved in the last decade, taxes seem to overwhelm even these two critical factors in the happiness equation. According to the Tax Foundation 2008 analysis, three of the top five unhappiest states—New York, Connecticut and New Jersey—have the highest state-local tax burdens. On the other hand, four of the top five happiest states—Louisiana, Florida, Tennessee and Arizona—are among the states with the lowest state-local tax burdens. True, correlation doesn’t prove causation, and high taxes alone don’t always make people miserable, but there’s something going on here.

In states with high property, income, and sales taxes like New York, people have less money to spend on other things that make them happy. They have less money to spend on vacations, hobbies, home improvements, eating out and child care. Another problem may be that people receive a low return on their tax dollars. The study’s authors note that people are least happy in states that impose high taxes but don’t provide matching public benefits (e.g. good highways to relieve congestion and reduce commute times). It’s in states where taxes disproportionately subsidize public employee pensions and entitlement programs, but don’t much improve the general public’s quality of life, that people are most unhappy.

This intuitively makes sense. If you’re paying more than a third of your income in taxes, as many New Yorkers do, then you expect to realize the benefits from your hard-earned tax dollars. You expect quality schools, good roads, low crime rates, and quick commutes. You expect your local and state governments to be responsive to your needs, not to the cash flows of entrenched public employee unions and other special interests.

Many liberal state governments like those in Albany, Trenton and Sacramento are spending more and more on entitlement programs and public employee pensions, racking up more and more debt, and imposing more and more taxes to pay for it all — while ignoring their taxpayers’ needs. Taxpayers, however, aren’t just getting unhappy. They’re getting out. United Van Lines’ 2009 annual study shows that New York, New Jersey, Michigan and Illinois are among the states with the highest outbound migration while Alabama and Tennessee are among the states with the highest inbound migration.

This doesn’t bode well for high-spending, high-tax states like New York where outbound migrants’ income is 13% greater than that of inbound migrants. In 2006, this differential meant a loss of $4.3 billion in taxpayer income for the state. State governments therefore have a vested interest in keeping residents happy by reducing taxes and reigning in irresponsible spending.

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  • 7 comments

    7 Comments so far

    1. Brian Block December 30th, 2009 10:26 am

      Greg,
      I love any blog post that quotes John Galt… okay in my book.

      We’re fortunate here in Virginia to have elected a new Rep. Governor who says he refuses to raise taxes. The outgoing governor proposed as his last act on the way out to raise state income taxes.

      With our business and tax friendly environment in Virginia, especially Northern Virginia, it’s no wonder that neighboring Marylanders are moving here, particularly the wealthier ones, as I predicted about a year and a half ago when Maryland imposed a surcharge tax on those earning over $1M/year. I wrote a blog entitled “Virginia Welcomes the Migration of Maryland Millionaires” and a year later after the prediction came true, it landed me on the Neil Cavuto show.

      Low taxes = happy citizens. It’s an equation that has stood the test of time.

    2. James Boyer December 30th, 2009 10:52 am

      Hi Greg,

      I don’t mean this to come off as negative against the south or the west but part of those high taxes in the North and North East are because they have been forced for the past 30+ years to subsidize the South and West through considerably higher per-capita spending by the federal government in the South and West than in the North and North East. I have seen numbers in the past that showed places like Arizona getting as much or more then $1.50 in federal government spending for every $1.00 in taxes paid, while states like New Jersey getting $0.75 in federal government spending for ever $1.00 in taxes paid.

      Reverse the situation, and I bet people in New York and Connecticut would be happier and those in Arizona would be much less happy.

      Of course we are not really directly talking about real estate but taxes to make a difference.

      Happy New Year.

    3. Thomas Johnson December 30th, 2009 3:25 pm

      @ James: Texas is south and west of Manhattan and we also come up short on the Fed bucks out vs Fed bucks in equation. I doubt many Texans would volunteer to leave given we are the fastest growing state in the Union. As a right to work state (union thugs must compete with free market workers), we are not shackled by the social unionists(union socialists?) who suck the cash flows of the governments.

      I do find it interesting thatthe complaint from NJ is that they don’t get enough of the spoils confiscated from the rest of the nation. In Texas, we get the same screwing by the Feds and just go to work. Would you like some cheese with that wine? Or more to the point, would you like to consider relocation to progressive Houston, TX? Our newly elected mayor can provide you our progressive diversity bona fides. I would love to welcome you as a colleague here. I am working on Teri, as well. She is a tough sell!

    4. Greg Swann December 30th, 2009 7:45 pm

      > part of those high taxes in the North and North East are because they have been forced for the past 30+ years to subsidize the South and West through considerably higher per-capita spending by the federal government

      No, the article and the underlying study are concerned solely with state and local taxes and governance. FWIW, I’m all for cutting taxes to zero everywhere.

    5. James Boyer December 30th, 2009 10:43 pm

      Thomas,

      Not a wine, and I have had enough cheese thank you.

      Texas may not now be getting more fed $$ then paid in, but I am not at all sure that during much of the second half of the 20th century Texas bound immigration was not heavily subsidized by the working stiffs of the north.

      I get very tired of hearing the digs on unions from the boys of the South, especially since perhaps 15% of the American work force is currently Unionized. The only Thugs we Americans have to deal with are the corporate thugs who do what then can to line their pockets and to hell with the country as long as they get theirs.

      Don’t get me wrong, I am not in any union, nor do I have any family members who are currently in any unions, but I do believe that those who want to blame even a small number of corporate America’s problems on unions probably don’t know much about the subject.

    6. Greg Swann December 30th, 2009 11:19 pm

      If we talk about the idea of the entitlement mentality, of which the kind of terminally parasitic behavior of some labor unions in some states is just one symptom, then we may not have very much disagreement between us. The UAW didn’t kill GM by itself. GM executives insisted that people must buy their cars, even if consumers didn’t perceive the value, and politicians ameliorated and ultimately subsidized their failure.

      The United States is being run as a kleptocracy, but instead of plundering the treasury and the accumulated wealth of the nation in behalf of a small criminal conspiracy, we rob from a rapidly-diminishing productive sector in behalf of a vast and ever-burgeoning population of moochers — at all strata of society.

      You can’t flip on the television without running across a cipher for your own grandmother proudly announcing how some politically-connected vendor has taught her how to rape the taxpayers — which is to say you and your kids, her own great-grandchildren — in her own behalf. This will be the real triumph of Obamacare — to turn every last resident of this once-proud nation into sniveling beggars, each one trying to snap up more benefits than his neighbor.

      We don’t have to eat each others’ flesh to be cannibals, and it seems plausible to me that we will not be suffered to live a life of freedom and independence, in the very near future. The entitlement mentality is such a shameful thing that the people who use it as a means of enslaving each other will not suffer the contradiction of an objective renunciation of their creed. In any case, once you’ve eaten a meal taken by theft, you’re not as apt to make noises about law and order, property rights, all that sanctimonious nonsense. Who am I do judge, once I’ve drunk my neighbor’s blood?

      Not a very cheerful way to call in the New Year. Here’s to your health, wealth and happiness, Jim!

    7. Teri L December 31st, 2009 6:05 am

      >I get very tired of hearing the digs on unions from the boys of the South,

      How about from a chick from the Rustbelt?

      I have family (long deceased) that came to Dayton from the coal mines of Kentucky. I know how unionizing helped miners- southern miners. I understand that history.

      I also see how having easy UAW jobs readily available allowed people to have their own home, put their kid through college, etc. I understand that history as well.

      But I see the flip side to all this. Two and three generations later I see a city of people that never tried to create their own life. They willing shackled themselves, enslaved themselves, to a union, to one job, to one life. Then when GM pulled out, some 20-30 years after publicly threatening to do so, they are middle-aged without skills, education, training. They are stuck. Their minds are still shackled, looking for something to feed them.

      The hungry sheep look up, and are not fed,
      But swoln with wind and the rank mist they draw,
      Rot inwardly, and foul contagion spread …

      -Milton

      The unions, regardless of what their early beginnings accomplished, have long outlived their ability to improve lives.