The inter-state job search migration

By Grover G. Norquist and Patrick Gleason
December 22, 2012

The Internal Revenue Service created a bit of a kerfuffle last week when it announced that it would no longer publish data on interstate taxpayer migration and the income they take with them. This would be a huge disservice not just to economists and policy analysts but to all Americans.

This IRS migration data provides the best evidence that low-tax, limited-government states attract employers, families and individuals, while states pursuing the same policies as the White House – higher taxes, bigger government and more onerous regulations – drive businesses and taxpayers away. It’s not hard to fathom why the Obama administration, despite its promise to be the most transparent in history, would want the IRS to stop publishing this damning evidence.

California, Illinois and Maryland, which have some of the highest tax burdens and biggest state governments in the country, may have finally realized the deleterious economic effects that come with following President Barack Obama’s approach to governance.

From 1995 to 2010, California had a net loss of 1.7 million tax filers, who took with them $37.2 billion in income. Governor Jerry Brown’s recently approved $50 billion income-tax and sales-tax hike, coupled with the state legislature’s new Democratic supermajority, has opened the tax floodgates in Sacramento and is expected to exacerbate this outflow.

Over this same period almost a million people have left Illinois, a state that last year passed the largest tax increase in its history. These erstwhile Illinois citizens took $32 billion in income with them to friendlier tax climates. The state’s Democratic governor, Pat Quinn, had to grant special carve-outs from his massive 2011 tax hikes to some of the biggest corporations in the state, such as Sears Holding Corp. and the Chicago Mercantile Exchange, just to prevent them from leaving the state.

This strategy of shrinking the taxpayer base and raising tax rates on businesses and people who cannot afford to have a full-time lobbyist at the state capital is a surefire way to drive more individuals and employers out ‑ putting the state’s finances on even shakier ground.

Then there is Maryland Governor Martin O’Malley, a 2016 presidential hopeful. He is such a huge proponent of Obama’s high-tax, high-spending agenda that he has already implemented many of the same policies in his state.

The results have been less than stellar. In O’Malley’s first term, more than 57,000 taxpayers fled Maryland, taking almost $3 billion in income with them.

States that have gone in the opposite direction on taxes from where Obama and Senate Majority Leader Harry Reid (D-Nev.) want to take the country have seen quite different results. During the same 15-year period, from 1995 to 2010, Texas and Tennessee, states that do not tax wages and have relatively low per capita spending, have seen an influx of 345,000 and 989,000 people, respectively, bringing more than $30 billion in income with them to their new homes in the Lone Star and Volunteer states.

Joel Kotkin and others have pointed out that energy resources and the policies to fully exploit them are one big reason that states like Texas are flourishing. But having a business-friendly, low-tax environment is crucial.

Consider California. It is the third-largest oil-producing state – yet it is a fiscal basket case. It loses revenue and jobs by having policies that prevent the state from fully using its resources. There are 11 billion barrels of oil and 19 trillion cubic feet of natural gas now recoverable with current technology just waiting to be tapped in California.

As the economist Arthur Laffer emphasized in his 2010 report for the Texas Public Policy Foundation, “Texas benefits from its abundant oil reserves because, in addition to the other advantages reviewed, Texas also fosters an environment that allows businesses, individuals and entrepreneurs to work, save and invest without facing overly burdensome regulatory costs and delays — including businesses in the oil industry. The same is not true for California. California’s regulations make it more difficult for its people to harness the abundant natural resources available to its residents.”

States like California and New York, which has also suffered a loss of taxpayers, should be reaping the economic benefits of their natural resources just like Texas and North Dakota. But their unwelcoming tax and regulatory regimes prevent it.

Fortunately, it appears that the IRS data documenting interstate migration trends will continue to be available after all. The IRS on Monday issued a response, saying it will continue to provide migration data and that its unavailability is temporary. It is crucial that government officials be held to their commitment to continue publishing this important information.

“The IRS should be applauded for continuing to provide this data,” the Tax Foundation’s Joe Henchman wrote in a post for the non-partisan organization’s Website. “However, I’m immensely curious as to who ordered them to cancel it in the first place, and why.”

As are we.

In so many of these failed states, there is no political will to rectify their overspending problems and unfunded pension liabilities. Perhaps most disconcerting is that lawmakers in charge – including Brown, O’Malley and Quinn – appear to believe the federal government will continue to bail them out of their profligacy and irresponsibility.

Taxpayers from successful states should be wary of these failing states ‑ including California, Illinois and Maryland ‑ and the threat they pose to the fiscal health of the entire nation.

PHOTO (Top): A man visits a job booth at the Dallas Military/Veteran Career Fair in Dallas, Texas February 10, 2009. REUTERS/Jessica Rinaldi

 PHOTO (Insert): A woman passes an advertisement at a career fair booth at the National Urban League’s Economic Empowerment Tour in Dallas, Texas June 13, 2009. REUTERS/Jessica Rinaldi

417 comments

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Blue states are supporting the red states. They contribute more and get back less from the federal government.

Posted by Leftcoastrocky | Report as abusive

Grover, I know that you and your ilk do not believe in science, but read up some time on Climate Change.

Posted by Leftcoastrocky | Report as abusive

It easy to see why the right wing likes a lot small governments instead of one big one. With more offices to vote for lower turn out and less knowledgeable voters for each office and less news coverage. That favors the right who has more turn out.

Then also big business can pick to locate in the one with lowest wages and over head (taxes).

Little man would be better served if the state and local election where done away with. Fewer but more visible offices to vote for and to be covered by the news.

Posted by Samrch | Report as abusive

The American government, purportedly comprised of representatives of “we, the people”, is today increasingly and hopelessly addicted to shoveling out more and more “revenue” than is coming in. I would be amused at the hue and cry and wringing of hands as each increase to America’s “debt limit” is “negotiated” were each instance not another step at increasing pace on the road to fiscal ruin. U.S. printing presses run full speed progressively and relentlessly diluting each and every dollar in current circulation.

Given that the current fiscal threats are much like a runaway train that takes a lot of track to stop once the throttle is closed, if the spigot of dollars were shut down completely right now the country WOULD immediately find itself in a downward economic spiral. That spiral might even be terminal.

Would I offend anyone if I suggest that some of our thinking and rhetoric has become myopic and flawed? You, Mr. Norquist, have become a “household name” with your “No new taxes” pledge and stance, one which I once also embraced. Unfortunately, such seductive simplicity is a luxury none of us can still afford.

Slashing tax rates did speed up America’s economic engine. Efficiency increased to some extent, but 20-20 hindsight suggests that other factors should be credited for some of that increase. If all one has is a hammer, after a while everything starts to look like a nail. There are “constraints” in most processes that bring about diminishing returns.

Lowering tax rates should be given much of the credit for development of the personal computer and necessary operating systems. These, in turn, should be given credit for some of the greatest advances in human accomplishments and standards of living in history. At the same time the huge fortunes which progressively accrued to Bill Gates/Microsoft and Steve Jobs/Apple are understandable if not necessary or socially desirable.

We can learn from history that the much more aggressive tax rates of the fifties and sixties did not “kill the goose that lays the golden egg” even if they did give it indigestion. Can we not also see from our present (and ever-increasing) deficit of trillions that America has reduced taxes far beyond possible economic stimulus?

A tax “rate system” that is too low will eventually bring about uncontrollable inflation. We need one that is consistent with our society’s willingness and capability to provide our government “necessary” revenue.

We need to approach this as a matter of priority rather than haste for “necessary” has thus far proven conspicuously impossible to define in a manner acceptable to all. The real question is are Americans mature enough, willing and able to separate “needs” from “wants”? To date the answer is a resounding NO!

Posted by OneOfTheSheep | Report as abusive

Let us look at the whole thing as leaner (and hungrier and poorer states) taking away (so called attracting and facilitating) businesses, driving the states with the experienced labor into unemployment. Where is the wisdom that is promoted by the privileged that ‘accomplished corporate leaders deserve (exorbitantly) higher pay’ while experienced labor force is laid off so that less experienced are paid (lower)in their place. Though this is a logical business plan for profits, promoted in good faith by the leading business schools, this is like robbing Peter to pay Paul leaving Peter hungry. May be the reverse will happen once Paul is rich. This trend is not sustainable as the balance sways back to created impoverished states which would have lost their resource, infrastructure and importantly experience base, for example for manufacturing. Many manufacturing companies are realizing that they made mistakes by moving their operations rapidly to some of the Southern States with less educated work force and less trained labor force to enjoy the freedom from unions and lower wages. It is about time we develop a national strategy for balanced education, skill development and as a result employment in all states instead of each state trying to rob each others’ business. Instead let the skilled work force compete for higher salaries and to generate growth by healthy competition. It is ridiculous our panicked (short term thinking) leaders are seeking band aids for personal political benefits which will only erode and hurt the national economy as a whole and lead our country into further debt. Let us be cognizant of how the reverse migration of factories to mid West is now happening from Southern states and even back from China to bring back growth from innovation. As federal support dwindles to states, sure enough states will learn to compete with each other to raise their economy. But we all know competitions will have a tendency to go out of hand and ugly leading to law suits between states which will be very expensive and discouraging to the public confidence to say the least. One may tend to say – Oh – be optimistic – but hadn’t we been optimistic before, till we learnt about many Madoffs and the likes? Let us not make a path for healthy states eroding other states into a cancerous condition because once sick, recovery will be a long process. A great country like this made of so may states with so many strengths and resources should not end up dividing as a result of some states living at the demise of some other states. We need to get off the premise we need poverty and hungry labor to enjoy(for some)wealth. I am only optimistic about fair unions, fair entrepreneurs and unselfish politicians all working for the national health and wealth. Let us make this impossible task possible.

Posted by slnsimhan | Report as abusive

1. The likes of Brown, Malloy et al are not lawmakers. They don’t make laws but approve or reject bills that come to their desks. The legislators are lawmakers.

2. You seem to forget that it is exactly because Brown implemented these same policies in the 1970s-1980s, that California became an attractive place to do business. I admit that there were many reasons for agglomeration in California but Brown’s efforts to put its books in order after Ronald Reagan left the state in a mess (and later the country) is a crucial one.

3. You conveniently forget that under Obama, federal spending has grown by about 1% p.a., the slowest rate in history. The yawning deficits are a product of tax revenues falling off because there is a recession.

4. Yes, Obama promised to strengthen safety nets but his original push in his first term, which you flatly refused to entertain, was for better education and a viable healthcare system. I don’t see that as excessive spending.

Posted by asrinath3 | Report as abusive

@sinsimhan,

“fair unions” and “unselfish politicians” are oxymorons! Entrepreneurs are individuals, some good, some bad, and most who make a “go” of it somewhere in between.

Every job that does not actually involve college-taught thinking and problem-solving skills is today being either automated or hacked up into 30-hour part time positions that can be effectively taught to anyone with Junior-high level math and Playboy reading skills in a week or two. You pick ‘em up and toss ‘em like lightbulbs, as needed.

“Experienced” (i.e. more expensive?) workers need not apply as these positions don’t pay sufficient to support a family (or even half of one), and one’s only “career path” is managing to somehow accrue enough money and experience to beat the odds against “small business startups” and become a successful entrepeneur
@sinsimhan,

“fair unions” and “unselfish politicians” are oxymorons! Entrepreneurs are individuals, some good, some bad, and most who make a “go” of it somewhere in between.

Every job that does not actually involve college-taught thinking and problem-solving skills is today either being automated being hacked up into 30-hour part time positions that can be effectively taught to anyone with Junior-high level math and Playboy reading skills in a week or two. From now on fewer and fewer human beings will be necessary to accomplish the things needed to keep our society “running”.

“Experienced” (i.e. more expensive?) workers need not apply as these positions don’t pay sufficient to support a family (or even half of one). The only “career path” will be managing to somehow accrue enough money and experience to beat the odds against “small business startups” and become a successful entrepeneur.

Posted by OneOfTheSheep | Report as abusive

No surprise. Just like water seeks the lowest level, business seeks the lowest input costs. The American worker is grateful for this natural law.

Posted by PCScipio | Report as abusive

The interstate job migration is just a symptom of the larger social change called globalization. As OOTS describes in his manner above, more and more people are competing for les and les jobs. It is happening in our country, and across the world. Modern technology has forced globalization upon us. The sooner we as a people and country acknowledge this, the smoother the transition will be. No society can survive when one social group subjugates in some fashion another social group. Economically in this case. In the last few centuries parts of the world fell far behind due to lack of communications and geography. The people in those societies remained content as they had nothing to compare to so did not know they were so far behind. That’ has changed. They have televisions available and now due tot high profit margin of smart phones, they even have those. So now they know. Look at the riots in South Africa, Myanmar, and even China. The national level governments and social systems of the world were not shaped in this kind of world, and are falling apart now. We need to acknowledge it and figure out a new form of government, initially at a national level, but designed to fit into a global society. The current western style capitalism and democracies are obviously not going to work. We are propping up failures at all levels now and the dams will break soon. We should prepare, not fight for the last remain scraps of what’s left a failing country.
There are now 7 billion people and only about 4 billion jobs. Automation and robotic will continue to eliminate jobs as we see them today. In 20 years we will have 9 billion people. It WILL happen. It CANNONT be stopped now (without mass destruction of course). What will we do with 9 billion people and only 3-4 billion jobs? 20 years after that? That’s only 40 years. Our children will have to live with our decision. The baby boomers need to stop being so greedy and understand that they cannot have all the things they promised themselves. Republican, Democrat, Rich, Poor, it doesn’t matter. We all in this together now. I believe the future is very bright and I think mankind will thrive. But the next 20 years could be pretty miserable if we don’t do something about it.

Posted by tmc | Report as abusive

@tmc
“The interstate job migration is just a symptom of the larger social change called globalization.”

Fully agreed, this is certainly true.

“The baby boomers need to stop being so greedy and understand that they cannot have all the things they promised themselves.”

Are you talking about old age pensioners??? Hopefully you are referring to the richies?

“Republican, Democrat, Rich, Poor, it doesn’t matter. We are all in this together now.”

This is an idea which would be nice if it were true, but I certainly don’t see that it is present reality.

The rich are international, often both personally, and clearly always through their corporations. Whereas the 99% are bound to their various countries. The situation is, as you say, similar at the individual US state level. The 99% of the world are played off against each other, to the benefit of the 1%. Basically, the 1% form an international gang. The 99% are kept divided by their nationalism, or their political parties, religions, whatever, to the benefit of the 1%. Scary as it is, we, the 99%, need a world government to deal in a fair and democratic way with the 1% gang.

Regarding too many workers: Good thing we have all these workers, as at some point as many resources get used up, it is going to take a lot more people to keep bread on the table.

Posted by xcanada2 | Report as abusive

@xcanada,

The 99% versus the 1% is a convenient, if totally inaccurate depiction whose sole purpose is to incite class warfare. The only ones whose attention it get are the press and the losers of our society.

You say: “Good thing we have all these workers, as at some point as many resources get used up, it is going to take a lot more people to keep bread on the table.”

Please. Think about this a bit. A person without a job isn’t a “worker”. They are unemployed, and make nothing while still needing to eat. Theu will be “using up” resources and not contributing back. This is not a situation where you can “make it up in volume”.

If and when society “shakes out” to where perhaps 40% have gainful employment the other 60% had better get real good real fast with gardening and animal husbandry. One has to remember that a majority of this country was surviving by subsistence farming before WW II.

Buy stock in Mother Earth News, because many of the necessary skills are no longer part of the average American’s mental tool kit.

Posted by OneOfTheSheep | Report as abusive

Same ole, same ole. Inferences, but no real data. Do warm states attract more the cold States? Do States that lavish corporate welfare gain more jobs?

Do States that take in far more federal dollars then they send to Washington gain more jobs?

I guess one can move to Texas if you don’t mind that many of your neighbors may not have health coverage,so you help make up the difference. That the schools are shortchanged. But the taxes are low, so you get don’t get what you don’t pay for.

The last time California raised the top tax rates, there was not some mass migration of millionaires.

But when the person thinks no taxes are the solution to everything, then one gets the type of article that was published.

Posted by pavoter1946 | Report as abusive

If low tax = more businesss growth, then Apple would have located in Niobrara County, Wyoming instead of the Silicon Valley in California.

In the real world (not the Grover Norquist world), big business location is far more about an educated workforce, good infrastructure, good weather for golfing, and an abundance of good-looking women around. That’s reality. Good accountants can fix taxes. They can not fix hillbilly.

Posted by AlkalineState | Report as abusive

The author has correlation, but cause and effect are different. Did the high taxes cause people to leave (as stated), or did the people leaving (ie. no jobs) cause the governments to raise taxes to make up for the shortage in income?

Posted by jyy | Report as abusive

You and yours want to know all about the data that supports your position regardless of any issues of causation, but when it comes to data supporting gun registration or control you’d rather the data didn’t even exist. Hypocrites.

Posted by borisjimbo | Report as abusive

Governors offering more of our money to compete against other governors to lure jobs from one part of our country to another. In other words, Americans fighting each other for the scraps that are left of our economy. In this day and age, the wealth of our country need not stay. They can very easily pick up a move somewhere else in the blink of an eye. If we continue to divide our country with the moronic rich vs. poor we will decline much more rapidly and settle in somewhere past fifth place economically. We need to work together to keep the wealthy in the country and give them a fair playing field against the BRIC countries. Raw capitalism will obviously not work. We as a country need to decide if we are going to work with China to bring in a new age of man, or if we are going to act like fools and try to hold onto a past that is slipping through our fingers. I was raised in the height of American power and influence to lead. I see that now our society teaches our children to follow, and whine.

Posted by tmc | Report as abusive

Americans like Norquist and Gleason must look around before holding such strong opinions.

Migration is almost always caused by massive inequalities of wealth.

For example in some parts of Africa or in Bangladesh, the average income is 1/50 (2%) of the average income in France, or, worse, 1/100 (1%) the income of the average Japanese.

So an African or Bangladeshi who can work in France at half the average French wage rate can earn, in only 2 weeks, the equivalent of a year’s income in Africa or Bangladesh. In Japan they can earn a year’s income in a week.

Thus the enormous force behind immigration.

The problem, of course, is two-fold:

1. Wages – Immigration into Europe pushes French and European wage rates downward, and puts many the native French and other Europeans out of work. Japan, wisely, rejects most immigration requests.

2. Rents – Immigration drives up rents in Europe because the immigrants occupy housing that would otherwise be occupied by Europeans. This hits the European poorest classes the hardest. But it strongly affects the European middle class apartment rents too.

Who benefits from the immigration? The European wealthy encourage immigration because it drives down their cost of labor, and the increasing rents make real estate holdings of the wealthy more profitable.

This same dynamic is happening all over the world, and especially in America, which allows more immigration than all the other nations in the world combined.

Thus the American working class is seeing its wages plummet and its rents increasing every month.

Who can blame someone wanting to immigrate? But the immigration flow is causing great economic and social instability in Europe and America.

Most of the state numbers cited here by Norquist et al. are being caused by massive foreign immigration into various American states from other countries, not migration of Americans from other American states.

And in those states where foreign immigration is highest, the American middle class is damaged the most. Their careers, families and financial lives destroyed forever. People have only one life to live.

But the wealthy class in America wants us to believe that immigration is a wonderful thing. And that’s understandable because it’s making them even richer, even though it’s destroying America.

Posted by AdamSmith | Report as abusive

Thus in Japan, immigration is prevented, to protect the Japanese people’s lives.

And even though Japan’s GDP is not growing as fast as China’s, and even though Japanese big business is pulling out all the stops to lower interest rates, for their own selfish purposes, the middle class of Japan continue to enjoy stable financial lives.

This is in great contrast to America, where immigration is allowed in huge numbers, more than all the immigration allowed into all other nations of the world combined.

And as one would expect, the American middle class has been obliterated, their children’s futures destroyed by plummeting wage rates and increasing rents caused by immigration.

Posted by AdamSmith | Report as abusive

Is it not perfectly clear that in America our professional politicians, both Democrats AND Republicans, have become very proficient at playing off citizen interest group against citizen interest group, pragmatists against moralists, and the comfortably well off against those falling out of the middle class?

They say whatever is necessary to stay in power term after term, all the while selling the priorities and influence of their “representation” to the highest bidder and thus becoming personally more and more well off. It is very much in the long term interest of such “betrayers of the public faith”, for that is what they are, that “we, the people” remain splintered and frustrated. This is why what is on the news never really changes, as everyone plows the same sterile soil again and again week after week, month after month and year after yearand nothing changes.

It would be contrary to their interests and priorities to frame and place before us the real choices that need to be made. No one knows what would happen if “We, the people” actually took back control of OUR government from them and their legions of bureaucrats.

Some of us might even demand serious long term planning to stop our government from taking our “ship of state” over the falls and onto economic shoals again and again. We taxpayers are trapped in a HOV lane to nowhere with no signs and no exits, helplessly watching our economic fuel gauge as it moves relentlessly toward “Empty”.

Our elected officials aren’t “that” smart. What they are doing is open and visible to one and all. The problem lies within us. “We, the people” don’t WANT to see and perceive what they are doing. If we did, we might be obligated to get off our lazy butts, put sticks in their spokes, and bring about changes long overdue!

No, we’d much rather sit all warm and comfy in front of our TVs watching inconsequential “reality” and game shows, soap operas, and football while stuffing our faces. Our rather obvious collective future on our present path is pretty much the world of Wall-E. Pass the chips and dip, please.

Posted by OneOfTheSheep | Report as abusive

@OneOfTheSheep

Re: “The 99% versus the 1% is a convenient, if totally inaccurate depiction whose sole purpose is to incite class warfare.”

Quite a bunch of inaccuracy and hyperbole here: The convenience of the 99/1% dichotomy is true, but, at least in my usage, it refers to those (the 99%) whose interests lie with the general populace of the country, versus those (the 1%) who are gaming the system for their own selfish purposes, generally those whom I perceive as our “leaders”, mostly the financial elite. You may argue that “greed is good”, but this certainly can’t be true when those same people have captured the government.

I certainly don’t shy away from the idea of class warfare, since this is what is being conducted against the general populace of America, indeed of the world. But, I understand that it is greatly to the advantage of the financial elite and their camp followers and proxies, to pretend that there is no war. If one is of the type that likes beating up and robbing others, there certainly is advantage to first getting the victims to tie their hands behind their backs. In the US, the media and politicians, beholden to the financial elite, convince the naive voters that removing social safety nets is in their interests; reducing government restrictions on bank behavior is good for them. The combination of democracy and a financially captured government/media works well for this purpose, producing a blind, sheep-like populace.

Regarding workers, including unemployed ones: One could view the unemployed as like inventory, ready to be put to work when needed. Actually, there is a lot of infrastructure in the US that needs rebuilding. The state of many of our roads is a national disgrace. The absence of high speed rail, when the Chinese literally can build thousands of miles per year, and we have none, is another indication of our decay. Compare the Shanghai Metro with that of NY. With all the rebuilding needed, all the unemployed and partially employed Americans, and no chance of putting the two together, that is a major failure of our system. A future such as envisioned by OneOfTheSheep, with 40% gainfully employed, I’m quite certain cannot last for long, nor should it.

Posted by xcanada2 | Report as abusive

Honest question: would the low levels of taxation in the red states that Norquist refers to be SUSTAINABLE if their pools of young, fit, healthy, mobile workers were not being parasitically replenished from “high-tax” (perhaps, sustainable-tax) states?

I actually agree that debts, taxes and spending are somewhat too high in SOME states (and needless to say, some states are beggars for pork-barrel spending — far too many tax dollars are wasted, and far too many politicians have cosy relationships with unions — I’m looking at San Bernardino, CA, here; based on recent Reuters reports). But I want to see stronger evidence that the low levels of taxation exhibited in some other states are both sustainable and exemplary; that if all states harmonized their taxation at these levels, America would be significantly more prosperous; and I’d furthermore like to see stronger evidence that this is the most important economic question of our time, and worth so much of the attention of good fellows like Norquist.

Reason for my questions? Partly this…
http://www.slyman.org/blog/2011/07/reaga nomics-and-prudent-taxation/
I’ve studied this question from a different angle and come to the opposite conclusions. I’d like to reconcile my work with the observations that Norquist and his friends are sharing with us. Is this possible?

Posted by matthewslyman | Report as abusive

@OneOfTheSheep:

Although I agree with your critique of politicians, the root cause is somewhere else besides “We, the people”, at least in the sense you are using it. You lay to blame at the Americans who need “to get off our lazy butts, put sticks in their spokes, and bring about changes long overdue!”.

But to me, the root cause is a failure of our system. Most of the many people I encountered in the last half century in the work force actually bust their butts for their bosses. They had very little time to figure out politically what was going on. And, as we know, mostly the rich got richer during that period, rich enough to buy the government. Then the game was pretty well over for the 99%.

We voted in Clinton, with great hope, and he sold us, the workers out, with abandonment of Glass-Steagall and NAFTA. We voted for Obama, and he sold us out with half-hearted medical reform, and now reduction of Medicare and social-security. Medical costs us twice as much as most other economically advanced countries, even when not covering 20% of the country; an extra 1.35 trillion dollars goes to the corporations every year, enough essentially to balance our federal deficit. And, more wars and military build-ups on the way. We voted for Bush Jr., and nothing better: continuation of Glass-Steagall enabled bank bubble, and the Iraq war, the largest loss of US power in more than a century, even worse (for us) than the stupid Vietnam war. These are all failures of our leadership and our system. We are not given reasonable choices. I blame the leadership, the people who control the politicians and the media. Likely they (the elite), our leaders, will not wake up until it is too late.

Posted by xcanada2 | Report as abusive

@xcanada2:
Well said, all of it.

Glass-Steagall, NAFTA, Iraq. How to rank them in severity? I can’t. Each one has been truly disasterous for America.

The one major economic force you didn’t mention is huge, maybe even bigger: immigration.

Immigration has flooded the American labor market, driven down American wage rates, driven up American rents, and destroyed millions of American middle class careers. And now it’s too late to resurrect them. Their kids are changed forever.

I can’t blame the immigrants, only ourselves for allowing it to happen, and the wealthy for facilitating it.

What you said xcanada2 makes good sense, as usual.

Posted by AdamSmith | Report as abusive

@xcanada2,

Thank you for proving my point.

Were “we, the people” not taught back in school that “our” government exists to serve US? Let’s have a show of hands of all those who believe this of “our” government of today. I don’t SEE any hands!

We ALL wear “two hats”…that of American Worker and that of American citizen. Yes, WE continue to choose our “representatives” in a “representative government”, but clearly there is something wrong with US when “we are not given reasonable choices” again and again.

We settle for less than adequate nominees from our major parties and then go through the motions of electing one of them. Why do we pretend surprise when they prove inadequate? A “failure of our system? WE are “our system” yet we refuse to accept that we are complicit and thus also responsible for things being as they are.

I never said or even inferred that the vast majority Americans don’t “bust their butts” for their employers (NOT “bosses”). Quite the contrary, WORKING Americans have taken a back seat in productivity to NO ONE elsewhere in this wide world.

But we are more mentally timid, by and large, than we should be. We typically defer to leadership by others simply to avoid personal embarrassment and personal responsibility if things go wrong.

You quite correctly point out ALL of our recent “leaders” (except Bush senior?) have failed to deliver on their promises and/or obligations of “leadership”. But “WE” voted in these people as well as those in Congress who no longer even pay attention to us.

Those who step forward to lead frequently have more confidence, enthusiasm and desire in abundance. Unfortunately the vision and talent needed to diagnose and prescribe remedies for our society’s ills are as uncommon as is the willingness to peak the truth when the news is not good or even bad. When we continue to “pull the handle” to re-elect again and again the “failures” we have sent to Congress, where but on our own shoulders can the blame be properly placed?

Walt Kelly in his “Pogo”comic strip some years ago “nailed it” when he had one of his characters state: “We has met the enemy and he is us”. Your claim that WE are innocent parties to what unfolds in America day after day, week after week, month after month and year after year makes about as much sense as the Flip Wilson character whose “excuse” for anything and everything is “The Devil made me do it”! The responsibily is OURS!

Do you really think the founding fathers of America had “more time” to “…figure out politically what was going on?” I don’t. Just getting through each day back then took a LOT more time than it does today.

And yet those good men, many with rather basic education hammered out totally new ideas of self-government to replace traditions of nobility and privilege that then held virtually exclusive and functionally absolute power in each and every corner of the globe. They also did what they did at great personal risk. Were they so much more than we, or are have “we, the people” just become intellectually lazy?

America wisely fights wars elsewhere to depose despots who would put their jack-boot on the jugular of world oil commerce for good reason. America, like it or not, IS the “world’s policeman”. If not us, who? America correctly chooses to stop military threats to world commerce where the problems originate because the alternative is to eventually suffer the inevitable “collateral damage” right here in our own streets and towns.

We fight crime more in ghettos than in the suburbs because the ghettos and their gangs and druggies are “where the crime is” 24/7. As bad as the “war on drugs” is here in America, it is much, much worse in Mexico and points south. There ineffective or duplicious governments must contest drug cartels for control of regions or even entire countries. Our choice is seldom between good and bad but most usually between bad and even worse.

My list of betrayals by our government is as long as yours, but quite different. Near the top I would list America’s Supreme Court. In the last half of America’s existence, these “honorable justices” have declared themselves and ALL judges above “the law”.

As a direct result, today the Oath of Office of judges means nothing. There is NO penalty for violating it. “Our judges are essentially unaccountable for any decision made in association with their “official duties”. They may decide a case using the wrong law, they may wield the law as a weapon against defenseless citizens with premeditated malice, and they may intentionally “interpret” a law to achieve results in clear conflict with original legislative intent. For none of these things or associated damages can they be tried or held personally responsible.

Does anyone seriously believe that the percentage of lawyers in our federal, state and local government has come about by chance? If there is a “1%” controlling America, it is not “corporations” except to such incidental extent as they own or manage them. It is not the “wealthy” except as money has bought the services of our “legal class” and thus enjoys undue advantage.

Beyond this, yes, Medicare SHOULD negotiate medication prices. Our “medical establishment” in general and hospitals specifically have far too many “built-in” conflicts of interest that work to the disadvantage of the medical “consumer”.

There is cooperation to the point of collusion between insurance companies and hospitals. There isn’t a man or a woman in America that can determine in advance of a complicated medical procedure what it will cost them or how much will be “covered” by available insurance. So why don’t “we, the people” demand changes? (silence) I can’t HEAR you!

Posted by OneOfTheSheep | Report as abusive

Awesome as usual OOTS. Reuters should give you a column. I curious as to what paintcan would say.

Posted by tmc | Report as abusive

Wait a minute — doesn’t this mean that the IRS budget can now shrink since they don’t need to collect, compile, and publish this data? I thought we needed to shrink government. Grover, are you saying that there’s some government spending that’s worthwhile?

Posted by Sanity-Monger | Report as abusive

Grover is apparently naive. Just because a company incorporates in Delaware (on paper), does not mean it is employing a bunch of people in Delaware. Reuters recently did an article on a small house in Wyoming that was found to be the home of 2,700 corporations. And no people. Grover’s big find in the IRS data on corporate re-location is about as reliable as those corporate charters.

Oh and Grover, I know it’s disappointing, but there is no industrial revolution happening in the Cayman Islands right now, in real life :)

Posted by AlkalineState | Report as abusive

AlkalineState makes sense.

Also, I live in a very high-tax state, and apartment rents here for all grades of apartment complexes are skyrocketing because of the population here is increasing rapidly. Where are the new arrivals coming from?

The increase in population here is coming from foreign born immigrants: illegal and legal immigrants, rich and poor immigrants, skilled and unskilled immigrants.

The apartment complex where I’ve lived for several years is now over 50% foreign born immigrants.

And this is a very high-tax state.

And the same thing is happening in low-tax states, and in almost every neighborhood everywhere in America.

Uncontrolled immigration is radically skewing all the numbers that Norquist uses, but nobody seems ready to acknowledge the immigration even exists in America.

Immigration is perhaps the largest economic force affecting America today. One can argue that it’s good or bad, but in either case, the size of its impact cannot be in doubt. It is a gigantic economic impact.

Posted by AdamSmith | Report as abusive

@OneOfTheSheep, Re your:
When we continue to “pull the handle” to re-elect again and again the “failures” we have sent to Congress, where but on our own shoulders can the blame be properly placed?

My impression is that the time of formation of the US was a politically revolutionary time, and we are not (yet) in such a time again. Of course, the founders of America were not the ordinary man, such as those who repeatedly “pull the handle for failures” today. As we agree, the financial/political system of the Western world is in crisis, and this is increasing being recognized. It is a time for reflection on the problems of our present system, and inquiry into the aims, means, and possible results of changes to our system. When the situation gets bad enough for the 99%, the earthquakes will start in earnest.

The technological (particularly the internet) revolution is a new major element available to mankind, available to promote justice and equality of mankind. It has also enabled the total internationalization and dominance of banking and business. Perhaps it really is the time for “Workers of the World Unite: We really need it this time!”. But unite around what, is the question.

Posted by xcanada2 | Report as abusive

Norquist says that workers follow the low corporate tax rates. The Corporate tax rate in Mexico is capped at 28%. In the US, it is 39%.

So….. why do Mexican immigrants come here looking for work, rather than the other way around?

It’s a simple question and we look forward to your response, Mr. Norquist.

Posted by AlkalineState | Report as abusive

Corporate tax rate in Bulgaria: 10%

Corporate tax rate in U.S.: 39%

When’s the last time you met someone re-locating to Bulgaria for a job? Simple question, Grover. We look forward to your response.

Posted by AlkalineState | Report as abusive

Good question, AlkalineState, about Mexico and Bulgaria.

Also, Norquist can find solace int the fact that the unbridled capitalism of Mexico has produced the world’s richest man, Carlos Slim.

And also the world’s worst crime rate. Yes, Mexico. Unfettered capitalism and low taxes personified.

Posted by AdamSmith | Report as abusive

Grover, we’re still waiting for your answer. This is your article, surely you check up on these things. You are supposed to be one of the brightest minds in conservative economics. And you are going to throw in the towel because AdamSmith and a semi-retired geo-chemist in Idaho are questioning your tax theories?

Weak! Come on, Norquist. Ducking questions on your own article? Surely your economic theories have more weight than that.

Posted by AlkalineState | Report as abusive

Corporate tax rate in Uzbekistan: 9%

Corporate tax rate in U.S.: 39%

Corporate home of Apple, Inc. (The world’s richest company): Not Uzbekistan

Posted by AlkalineState | Report as abusive

Businesses are highly inclined to locate production in low cost and, or low tax geographies. Just a simple fact. Who in their right mind would argue with that?

Posted by sarkozyrocks | Report as abusive

sarkozyrocks states: “Businesses are highly inclined to locate production in low cost and, or low tax geographies. Just a simple fact. Who in their right mind would argue with that?”

The data. For example, Google is located in high-tax Palo Alto, California (instead of Oklahoma) because the people in Oklahoma are largely bible-thumpers and tweakers who believe that the world is 6,000 years old. They pride themselves on lack of education. Higher tech Businesses will pay a little more in order to avoid that and have a reliable and educated work force.

Posted by AlkalineState | Report as abusive

And IBM s less than 20% American. Indian Business Machines.

Posted by tmc | Report as abusive

Sure, Texas, high employment growth. OK, don’t count the low wage jobs, Grover will poopoo that. Let’s focus on the high wage earners, F-35 manufacturing, NASA, military support. Oh wait, all those Federally funded, tax payer supported jobs. But we hate taxes. Just keep sending it our way. We never saw a government program in Texas we didn’t like, except maybe healthcare. Superconducting semicollider anyone? I’ll take two for Texas.

Posted by GetReallyReal1 | Report as abusive

@alkalinestate: Then the emergence of Chinese manufacturing has had little to no effect on blue collar employment in the US and Europe? Businesses really haven’t located manufacturing in China because of low costs? Your blind ideology is not just shocking, it’s frightening. On another point: where do you think your hate-speech attacks, launched wholesale against the people of an entire state, will get you? Please keep this discussion civilized.

Posted by sarkozyrocks | Report as abusive

I think AlkalineState has been very civil. It’s only the data that stings.

Posted by AdamSmith | Report as abusive

sarkozy, low-cost manufacturing is different than a low coporate tax rate, isn’t it? If Grover Norquist was worried about outsourcing of jobs overseas, he’d be talking import tariffs, wouldn’t he? So why isn’t he? They have historically run from 20 – 40% in the U.S., since the late 1700′s. In the past 30 years, these import tariffs have dwindled to 1.3%. But he still thinks the solution is just…. reduce corporate taxes in Arkansas. Or what ever his point is here. He won’t say, now that he’s been called on it.

Regarding Oklahoma, I do apologize for my snide remark. That was unnecessary. Good people of Oklahoma, it is not your fault.

Posted by AlkalineState | Report as abusive

Of course a large portion of what is called “job creation” in low-tax states is actually just job relocation: some Americans gaining jobs at the expense of other Americans. Mid-size to large companies may move from one state to another for tax purposes reasonably often, but the entrepreneurs who drive job growth rather than simply shift jobs around are much less likely to move across the country just to start their businesses in lower-tax states.

Posted by mgear | Report as abusive

Apple may like CA’s talent pool but it sure doesn’t like their high tax rates:

http://www.nytimes.com/2012/04/29/busine ss/apples-tax-strategy-aims-at-low-tax-s tates-and-nations.html?pagewanted=all&_r =0

Posted by Wesley_Snipes | Report as abusive

We must be very careful in bailing out the states. I would fight with everything I have to NOT pay some union state employees grossly oversized retirement when I receive NOTHING. I can’t stand the though of it, but I will admit it most likely will have to be done. Just please hide it well, lot’s and lot’s of spin, so it won’t hurt quite so bad. If this becomes public you will see union houses burning. I don’t think anyone wants that.
Of course Mr. Norquist knows this. I just hope he has enough humility not to use it for spite.

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