Tyler Cowen, Columnist

Californians Are Dreaming of Lower Taxes

Recent research suggests that higher rates are driving many high earners out of the state.

The state does have its charms.

Photographer: Chris Delmas/AFP

Some Americans like to mock France and Sweden for their high taxes. Yet California — whose economy is bigger than that of both countries — has comparable tax rates, when federal and state tolls are combined, and a new study suggests that they are causing some top earners to leave the state entirely.

This is an issue for more than America’s 39 million Californians. Despite the long-held consensus among many analysts that state-level tax rates don’t matter much, some states seemed to have reached a point at which tax rates are driving many residents’ decisions. That raises the question of whether taxes can continue to rise without significant negative economic consequences.