In the race to recover what was lost economically during the pandemic Republican-led states are winning, The Wall Street Journal Reports.
Red states have an advantage over Blue ones as all work to battle a Biden economy that has them fighting uphill.
Since February of 2020 the share of US jobs located in red-states has grown by half a percentage point. Red states have added 341,000 job while Blue states are still missing 1,3 million jobs they once had.
Many corporations are fleeing high-tax Blue states for more tax-favorable Red states.
Several major companies have recently announced moves of their headquarters from blue to red states. Hedge-fund company Citadel said recently it would move its headquarters from Chicago to Miami, and Caterpillar Inc. plans to move from Illinois to Texas.
To track each state’s progress toward normal since the pandemic began, Moody’s Analytics developed an index of 13 metrics, including the value of goods and services produced, employment, retail sales and new-home listings. Eleven of the 15 states with the highest readings through mid-June were red. Eight of the bottom 10 were blue.
Behind those differences is mass migration. Forty-six million people moved to a different ZIP Code in the year through February 2022, the most in any 12-month period in records going back to 2010, according to a Moody’s analysis of Equifax Inc. consumer-credit reports. The states that gained the most, led by Florida, Texas and North Carolina, are almost all red, as defined by the Cook Political Report based on how states voted in the past two presidential elections. The states that lost the most residents are almost all blue, led by California, New York and Illinois.
The report also indicates that a big driver in the movement during the pandemic was a search for more affordable housing, something Republican-led states offered.
The report offered one insightful glimpse into the real incentive to move:
The states that gained the most migrants levied an average maximum income-tax rate of 3.8% on individuals. Four—Florida, Texas, Tennessee and Nevada—charged no income tax at all. The 10 states that lost the most residents to moves have an average tax rate of 8.0%.
Taxes, taxes, taxes…
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