Jun 21, 2019, 02:12pm
Low-Tax States Adding Jobs At Double The Pace Of High-Tax States Since The Trump Tax Cut
Since President Trump signed the big tax cut and reform act in December 2017, the pace of private-sector job creation in the nationís 27 low-tax states has doubled that of their high-tax peers through May of 2019, according to data released today from the U.S. Bureau of Labor Statistics. Manufacturing job growth is even higher with a 126% job-creation advantage in states with low taxes.
Overall, the 27 low-tax states saw private-sector job growth of 3.2% in the 18 months following the federal tax cut, with manufacturing payrolls growing 3.0%. The 23 high-tax states grew their private sector employment by 1.6%, half as fast as the least taxed states. Manufacturing jobs grew 1.3% over the 18-month period in the high-tax states.
This job growth advantage is likely due to the Tax Cuts and Jobs Act of 2017ís limitation of the deductibility of state and local taxes (SALT) deduction to $10,000 per filing household. This change in the tax code has shifted more than $85 billion of capital from the 23 high-tax states such as California and New York to low-tax states such as Texas and Florida by ending the federal subsidy for high state and local taxes.
Data suggests that about 500,000 jobs were created in low-tax states that might have otherwise gone to high-tax states absent the change to the federal tax code.