"In the United States, workers in cities offering above-average nominal wages pay 30 percent more in federal taxes than otherwise identical workers in cities offering below-average wages. In The Unequal Geographic Burden of Federal Taxation (NBER Working Paper No. 13995), author David Albouy estimates that federal taxes lower long-run employment levels in high-wage areas by 15 percent, depress land prices there by 25 percent, and reduce housing prices in the area by 4 percent. Economists term these negative outcomes “locational inefficiencies,” and Albouy estimates that they cost taxpayers $34 billion in 2005. In the United States, highly taxed areas tend to be in large cities inside of populous states. Albouy conjectures that their higher tax burdens may be a reflection of their relatively low Senate rep
I also found his interview in Fox Business.
As I pointed out in previous posting, Federal government's return to CA/NY is only 80 cent on a dollar. Now that both CA and NY has severe shortage in state budget. It is time for CA/NY resident to stand up! Afterall, CA/NY are primary driver of industry and economy of the future.