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The South Will Rise Again
[Bloomberg] It's hard to find controlled experiments in finance. But they exist. East and West Germany, North and South Korea, Chile and Venezuela. In crossing a border, you can immediately see the difference in economic output and financial well-being from one country to the next, based on variations in tax and regulatory policy. The same goes for within the U.S. Tax policy drives economic behavior in this country, because people respond to incentives. As taxes in high-tax states have gone higher, there's been a migration out of states like New York, New Jersey and California, and into places like Texas and Florida. ...With the proposed Republican tax reform bill comes a $10,000 limit on state and local tax deductions for individuals. Some of the impact has been offset by lower marginal tax rates, but the net effect makes low-tax states more attractive on a relative basis, which is a bit of an understatement: The difference between living in New Jersey and living in Florida could amount to tens of thousands of dollars for high-income households. ...My prediction: Over time, New York City will lose its status as the intellectual and cultural capital of America. The real estate market in California, at stretched valuations, will suffer. Minnesota, Oregon, Iowa, Maine and others will also feel the pain. Florida and Texas will become the new centers of finance and innovation, with real estate values in Austin and Miami -- and even Nashville -- reaching valuations once reserved for California and New York over the course of a few decades. Posted by: g(r)omgoru 2018-01-04 |
| http://www.rantburg.com/poparticle.php?ID=505061 |