States with higher taxes and heavier regulation are losing residents. That shuffle could reshape national political power for decades to come.

In February, the Tax Foundation’s Jared Walczak observed that not long ago, it was still possible to speak of a “typical” state income tax with a top rate of about six percent.

“That is no longer the case,” he continued. “Today, far more states prioritize low, competitive rates, whereas a smaller number have abandoned the middle for much higher rates.”

Walczak noted that, in 2006, 15 states had top rates of personal income tax below five percent (including those with no personal income tax); now, 26 states do. Over the same period, the number of states with a double-digit top rate has risen from one to six.  

This is another point of divergence between “Red” and “Blue” America. The Wall Street Journal reported on Walczak’s work with “Red and Blue States Are Growing Further Apart on Income Tax.” 

“Republican-led states are racing each other to flatten, cut and eliminate individual income taxes,” reporters Richard Rubin and Jeanne Whalen note. By contrast, “Democratic-controlled states are moving the opposite way, pushing to increase taxes on top earners…” Meanwhile, “The middle ground is quickly disappearing.”

Disappearing along with it, on current trends, could be the Democratic Party’s chances of controlling either the White House or House of Representatives.

...read more at thedailyeconomy.org