States that have abused their businesses with the harshest COVID-19 lockdown rules are going to reap the most from the COVID-19 stimulus package. The Wall Street Journal editorial board writes:
States will also benefit from the federal enhanced $300 weekly unemployment benefits, which are taxable income in most states. The jobless benefit sweetener will especially help states with higher unemployment such as New Jersey (10.2%), Hawaii (10.1%), New York (8.4%), Connecticut (8.2%) and California (8.2%).
New Bureau of Economic Analysis data show how blue states that shut down more businesses have reaped larger federal payments. Transfer receipts grew significantly more for New Jersey (67.6%), California (54.6%), Illinois (51.7%), and New York (44.7%) than for Arizona (35.4%), Florida (26.5%), Wisconsin (22.5%) and South Dakota (20.9%) from the third quarter of 2019 to the third quarter of 2020.
At the same time, wages and salaries increased significantly more in states that allowed more businesses to reopen such as Arizona (4.7%), South Dakota (5.5%), Florida (1.7%) and Wisconsin (2.9%) than in states that maintained stricter lockdowns like New York (-1.6%), New Jersey (-1%), Illinois (0.2%) and California (2.3%).
It’s no wonder Americans are fleeing to states where their money and time are respected by the local government.
Every dollar in taxes your state or city takes away from you is one more dollar you can’t use to generate compounding over time. You don’t want to miss out on the miracle of compounding.
Action Line: For 2021, take a good hard look at the amount of taxes you paid to your state in 2020, and do a back of the napkin calculation of how much money could that become with compounding by your retirement. Then ask yourself, is it worth it to live here, or should you look for a better America?
