Saturday, May 23, 2020

Where Does the Money Go? Where Should It?

Brendan McDermid, Rahel Patrasso/Reuters
The Cuomo–Scott cage match replicates the American debate in miniature.
W ith the debate over additional epidemic aid to the states simmering, Florida senator Rick Scott and New York governor Andrew Cuomo are taking a special interest in one another
Senator Scott used to be Governor Scott. He took office in Florida in 2011, three days after Cuomo did in New York. The two states had a lot in common at the time: Both had been hammered by the financial crisis, both had lost a lot of jobs during that crisis, and—this part is sometimes forgotten—both had seen significant numbers of residents moving elsewhere.
After having led the country in net domestic migration (meaning people moving from one part of the United States to another) for years, Florida had slipped behind Texas in 2006—and by 2008, it was losing population to other states. Both New York and Florida began to make modest population recoveries in 2010, but New York’s petered out. Between 2010 and 2019, its net domestic migration decline was almost 1.4 million people. Florida has kept growing. It surpassed New York as the third-most-populous state in 2014. New York is probably going to lose a House seat after the next census; it already is losing part of its tax base to Florida, as even Governor Cuomo has been forced to admit.
How bad is it? New York officials currently are scrutinizing dentists’ records and veterinarians’ bills to make sure that former New Yorkers who have relocated to Florida aren’t exceeding their quota of New York days. “If you’re a high earner in New York and you move to Florida, your chances of a residency audit are 100 percent,” Barry Horowitz of WithumSmith+Brown, an accounting firm, told CNBC.
Who wouldn’t want to sign up for that?
New York has a very lopsided tax system, with 1 percent of taxpayers coughing up almost half of the state’s income-tax revenue. Every time New York loses a Carl Icahn to Florida, the state treasury feels the pinch.
Florida is happy to have New York’s former taxpayers. And New York’s former taxpayers have reason to be happy in Florida.
“Look at Cuomo and me,” says Senator Scott. “We were elected at the same time. I went about trying to recruit companies and people to move to Florida. We had lost 832,000 jobs in four years. I went to New York to recruit companies, and Cuomo was livid. At first, the reaction was, ‘Nobody’s moving.’ By the time I left, people were moving in in droves. Why? New York’s budget is almost double Florida’s, but it has 2 million less people.” (If you want a flash fact-check: New York State’s budget in 2019 was $176 billion for 19.5 million people; Florida’s was $91 billion for 21.5 million people.) “People move out of New York because they’re sick and tired of the taxes, and now, instead of trying to control his budget, Cuomo wants Florida to pay extra.”
It wasn’t just New York. As governor, Scott says he was tempted to put up billboards taunting California’s governor at the time, Jerry Brown: “Same haircut. Lower taxes. Move to Florida.”
Read the rest from Kevin D. Williamson HERE.

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