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Economics strikes again! July 22, 2007

Posted by Ian in policy.
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Okay last post for today… turning off my computer after this:

Report in the Toronto Star about the booming American Southwest and the water problems caused by millions of affluent people living in a desert. In the article they discuss how the rust belt around the great lakes could easily accomodate many more people and not have to worry about water issues. Not surprisingly at the end you have some professor saying that the government should step in to provide inducements for people to live in ecologically sustainable areas.

I would suggest that the reason people don’t live in the rust belt is because it is not a desireable place to be from a tax perspective. Consider that of the States mentioned in that report Ohio and New York are both in the bottom ten of the Tax Foundations Business Tax Climate Index. High taxes keep businesses away. No new businesses, no new jobs, no reason for people to move. That’s without even getting into the union vs. right to work debate. If you poke around on the Tax Foundation’s website or the Bureau of Labor’s website you would probably find that wages in the rust belt are only average to below average whilst taxes are average or above. Seems a fairly straightforward issue to me…

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