At Free Exchange, A.S. punches her internal Economist credentials by telling only half the story:
Migration: Texas, here we come | The Economist: IN THE ten years I’ve lived in New York I forgot how to drive. Lately I’ve been spending lots of time in Austin, Texas. Enough so that I’ve had to start driving again. When you go many years without driving, it becomes terrifying. So to refresh my skills I took lessons with a wonderfully patient and brave woman who has taught driving in Austin for nearly thirty years. I expected to be one of her few adult students, but no. My instructor claimed in the past few years the number of adult students increased exponentially, not quite rivalling the number of teenagers. Most are tech workers who come from all over the world, drawn by the vigorous labour market. Adult driving students struck me as a rather interesting economic indicator. It doesn't tell us anything we didn't already know. Migration statistics reveal that people are moving in droves to Texas. Why? Jobs and no state income taxes. High earning New Yorkers and Californians can take home between 9% and 11% more of their income by moving to Texas. Every trip down I speak to at least one bitter New Yorker/Californian fed up with high taxes and cost of living...
No, not half the story. Much less than half the story. The Tax Foundation tells us that "Tax Freedom Day" in Texas is April 5--that is, that Texans pay 26.0% of their income in taxes--while "Tax Freedom Day" in California is April 14--that is, that Californians pay 28.5% of their income in taxes. Roughly half of that difference comes from the fact that our federal tax system is somewhat progressive: the amount by which Texas is a low-tax state is not (as a naive reader of A.S. would suppose) 10% of income but rather about 1.3% of income.
And, of course, to at least some extent you get what you pay for.
And then there is the other half of the story: costs of living in New York and (coastal, metropolitan) California are high because there isn't much space and because they are very nice places to be:
Santa Clara County Population:
1980: 1,295,071
1990: 1,497,577
2000: 1,682,585
2010: 1,879,700
And Barry Ritholtz reblogs Richard Florida:
Now don't get me wrong: Austin and Travis County are also very nice places--especially if you are a U.T. professor and can spend June, July, and August elsewhere. It would be wonderful if we could figure out a way to make the economies of Austin in particular and Travis County in general as dynamic and productive as those of New York and San Francisco...
