Cotton Boll Conspiracy cites a Boston columnist for the idea that, as much as anything, LeBron James went to Florida to lower his tax bill:
But it is no coincidence that far more people migrate from high-tax states (California, New York, Ohio) to low-tax states (Florida, New Hampshire, Texas) than the other way around. When tax rates bite, taxpayers and businesses are driven to escape – or are deterred from coming in the first place. There’s nothing inexplicable about the fact that people don’t like paying high taxes and may change their lives to avoid them. The real mystery is why so many advocates of high taxes never seem to learn that lesson.Jacoby's observation, however, fails to explain why nearly all the leading centers of innovation and creativity- New York, Boston, LA, Silicon Valley, Seattle- are not relocating to the low-tax havens he says everyone's fleeing to.
I would argue that there are a couple major differences between LeBron James and the leading centers of creativity such as Silicon Valley and the 128 Corridor in Boston. Namely, for an NBA player there are fewer mitigating factors behind relocation, and James himself is, in essence, a center of innovation and creativity.
ReplyDeleteNo matter what team James chooses, the game is played the same. As such, he can afford to look at non-performance factors such as taxes when making his decision. Big-time companies have many more factors to consider when considering whether to stay put or relocate.
Leading centers of innovation, while they have many things that draw creative minds, such as good universities, great cultural amenities and a wide-range of creative-minded people, are often weighed down by negatives such as high tax rates and overly burdensome regulatory structures.
The difference is, companies have a much harder time picking up and moving to lower-tax locale. And, since there aren't many places with a Stanford or an MIT or an Columbia University nearby turning out bright minds, they're more willing to put up with hurdles government puts in their way.
James, not surprisingly, is much more of a "free agent." His ability to act in his own best interest is much simpler than that of a large corporation.