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OpinionColumnistsLane Filler

The fallacy of 'bad for business' states

When President Donald Trump said he would be

When President Donald Trump said he would be changing his residency from New York to Florida, he sparked a conversation about high-taxed states vs. low-taxed states. Credit: AP/Susan Walsh

When news broke last week that President Donald Trump was changing his residency from New York to Florida, the memes popped fast. First came the hope that Trump's migration could add to the already rich "Florida man" thread that has brought us such headlines as "Florida Man Claims He Only Drank at Stoplights, and Not While Driving" and "Florida Man Arrested For Tossing Gator into Wendy's."

Those are fun, but they're nothing compared with potential headlines like "Florida Man Wreaks Havoc on United States, Calls Reports of Weeping Throngs 'Fake News.'"

But a lot of the traffic in my inbox, Facebook page, and Twitter feed centered on something else: the reasons people flee New York, topped by taxes and business climate. And it made me wonder whether the state really is doomed.

Reports every year, particularly from the Tax Foundation, a bipartisan nonprofit think tank, assail New York for its business climate. New York is always almost ranked 49th, but some other organizations regularly rank it 50th. The dismal rankings have been the standard throughout my lifetime. And local media reports of these conclusions are dominated by warnings from local stakeholders that New York and other high-tax states like New Jersey, California and Connecticut will be financial wastelands full of nothing but tumbleweeds and Dollar General stores if change doesn't come immediately.

So shouldn't these states be poor and desolate by now, and the top states in the rankings, Wyoming and South Dakota, be rich? When will the great shift that leaves Cheyenne and Pierre as the nation's economic capitals finally come?

New York ranks third in the nation in per capita income, with $68,667, while New Jersey ranks fourth ($67,609), California sixth ($62,586) and Connecticut first ($74,561). These are, according to the Tax Foundation, the four worst business tax climates in the nation.

Wyoming, with the "top" business tax climate, ranks ninth in per capita income ($60,095), and South Dakota, in second place on business climate, ranks 24th in income ($50,141). A look at the full list would lead to the conclusion that bad business tax climates are closely correlated with high per capita income, and good business climates with low incomes.

Why such a counterintuitive correlation? Because such studies never take into consideration what those taxes pay for, and how much businesses and people might want or need them.

High taxes on Long Island, for instance, pay for extraordinary police protection, and well-funded schools, parks, beaches, roads, social services and public transportation. None of this is perfect. And paying for it is no fun. But states that have far less seem to prosper far less.

Many of the barriers to doing business in New York, or living a comfortable life, are monstrous and need to be addressed. And there are moves so punitive, like adopting single-payer health care at the state level and huge tax increases to fund it, that could really send capital fleeing.

But in all the complaining, common sense is sometimes lost. Real estate prices in New York  are sky-high because so many people want to live here. Taxes are so high because people demand services, and have agreed to pay police and educators high wages. And people do leave, for good reason, and others come, and so it goes.

As for Trump, and many other people that wealthy, they live on planes and out of suitcases and in a dozen homes, and their state residency is a manipulated legal concept, not a physical fact. I don't mind Trump's Florida move at all. I just wish he'd act like most other New Yorkers headed down to Palm Beach, and retire.

Lane Filler is a member of Newsday's editorial board.

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