Source: EconLog
by Scott Sumner
“In previous posts I’ve discussed tax competition between states. This competition intensified after the SALT deduction was limited to $10,000. Congress recently increased the SALT limit back up to $40,000, however, which will significantly reduce tax competition between states. In the future, housing policy may become the number one factor in competition for new residents, especially as immigration restrictions and sharply lower birthrates slow or even end the growth of America’s population. Despite high taxes and burdensome regulations, California has extremely high housing prices. This suggests that there is still a strong demand to live here, which could lead to a large population inflow if regulations on building were further liberalized. ” (08/12/25)