A basic argument about taxes is that people vote with their feet – if state taxes are high, people move to lower tax states. In Texas, we believe that’s one big reason we have weathered the recession better than many other states and why people and businesses move here (largely from the northeast and from California). Here’s a really cool map by the Tax Foundation:

Above is the Tax Foundation’s 2011 map of how much income states lose as a result of interstate migration. It tracks very closely with rates of taxation. The theory at work here is that if you tax income severely enough, high earners will find ways to conceal their income or take it elsewhere. The only real surprise is that California is only the country’s second-biggest loser and Texas only the third-biggest gainer.