My take-away from this excellent piece by Joel Kotkin is that keeping more of your money matters. In other words, state taxes matter. Look at the magnetic pulling power of the three power states in the sun belt with no income taxes: Texas, Tennessee, and Florida. It turns out state lines can be re-drawn with the help of overbearing government excess. Because the new California is Texas and Tennessee, and the new New York/New England is Florida. Money travels to where it’s treated well. Just don’t tell the politicians. Kotkin writes in Forbes:
Among the 71 largest metro areas, the biggest winners are primarily in fast-growing regions of the Sun Belt. Texas is home to three of the 10 metroareas that have generated the strongest job growth over the past decade, led by No. 1 Austin where the business services job count has expanded 37.1%since 2012 and 7.2% last year. Other strong Texas performers include No. 6 San Antonio-New Braunfels, where the business services job count is up 21.3% since 2012, and stalwart Dallas-Plano-Irving, which ranks seventh on our list.
Elsewhere in the Sun Belt, Florida has also seen a surge of these white-collar jobs, led by Orlando-Kissimmee-Sanford. Like Austin, Orlando is blessed with a growing tech sector, which is increasingly congruent with business service growth. The area’s job count in the sector has grown 31.3% since 2012 and 5.1% last year, placing it second on our 2018 list. Also racking up these jobs are No. 11 Tampa-Saint Petersburg-Clearwater, No. 18 Ft. Lauderdale-Pompano Beach-Clearwater and No. 19 Miami-Miami Beach-Kendall.
Three other Sun Belt players in the top 10 are No. 4 Nashville-Davidson-Murfreesboro-Franklin Tenn., No. 8 Charlotte-Concord-Gastonia N.C.-S.C., and No. 9 Raleigh, N.C. Like Orlando and Austin, all three have fast growing tech sectors and strong domestic in-migration. They’re all among the metro areas with the fastest growing populations of millennials, who are the primary source of new workers for these industries.
Workers in professional and business services earn enough to care about income taxes and also are prime candidates to buy homes, so key economic factors fueling growth in these places are lower home prices, less regulation and, in most cases, the lack of an income tax. This could become a bigger factor given the new limits on deductions for local taxes. For the new generation of workers in these industries, Sun Belt cities offer unique opportunities, not to mention a break from chilly weather.
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