They're not 'hospitable,' they're 'advantageous' due to being lower tax rates. If anything, lower tax rates make places less 'hospitable' in the long run.
Being hospitable is more about whether the state makes it a pain in the ass to do business.
Taxes are the least worst part of doing business. It's all the other subjectively defined and capriciously enforced regulatory BS that drives business away. You can't run a business let alone get financing to create one when a huge chunk of your costs are a question mark.
It is a fiscal detriment to CA and NY though.
Ah yes, the government services the people will need after these locusts move in and price generations of locals out of their homes.
They rely massively on government services. They depend on an educated workforce. They depend on law and order to prevent their workplaces from bandits. They depend on massive navies that allow goods to be shipped across the world without concern. They depend on courts to enforce contracts so that they can build their business on contracts rather than having to establish personal trust with everybody they do business with. They depend on a stable currency. They depend on a regulated finance market. They depend on a massive pacified customer base.
I've only scratched the surface, there's lots more.
When a billionaire moves to Wyoming, the marginal tax revenue is far greater than the marginal cost of police services, for example.
There’s some manifold of Pareto-optimal solutions to the problem of taxes and services.
California, for example, spends a lot of money to get not-great public schools, and has housing costs that are out of control. So if you’re importing new hires from other states, and pay them a lot to live here, and personally pay high taxes on top of that… that doesn’t seem like a Pareto-optimal point.
At some point, the wealthy will decide to move someplace that looks more Pareto-optimal. Better externalities, lower taxes, or both.
https://bipartisanpolicy.org/issue-brief/what-a-new-laffer-c...
FTA: For years, policymakers and economists have debated the shape and peak of the Laffer curve, a theoretical model suggesting that if top tax rates increase beyond a certain point—called the revenue-maximizing rate—they will yield negative marginal revenue.
A new paper from economists at the Joint Committee on Taxation finds that the Laffer curve is flatter than previous theories have suggested, meaning the revenue-maximizing “rate” might be a broad range rather than a single point.
Lawmakers looking to raise taxes might find it difficult to raise substantial revenue from top rate increases; however, broadening the base, examining untaxed sectors, and reducing the tax gap represent promising pathways to closing the gap between revenue and spending.
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I'm glad they highlighted that instead of increasing the tax rate, broaden the tax base. For example, if they treated borrow-spend-die as income. We could keep a lower tax rate. The same argument could be made for eliminating the estate tax. Treat inheritances as income for tax purposes.
When Washington was a low tax state, it spawned Amazon, Microsoft, Boeing, Starbucks, Costco, Nordstrom, T Mobile, Expedia, etc.