High Taxes Driving Millionaires to Low-Tax States, Creighton Economist Warns
- Steve Jurrens
- 1 hour ago
- 4 min read
Northeast Radio SD News – Special Report - In the newly released June 2026 Economic Trends report from the Creighton Institute for Economic Inquiry, Dr. Ernie Goss, Ph.D., takes aim at rising tax burdens on wealthy Americans, warning that aggressive taxation is fueling a significant domestic migration shift toward low-tax states.
Titled “Government Is Plucking the Financial Feathers of High Income Workers,” the report pairs Dr. Goss’s sharp critique of fiscal policy with the latest data from Creighton’s monthly surveys of supply managers and rural bank CEOs. The findings paint a picture of an economy grappling with localized manufacturing growth, a struggling agricultural sector, and stubborn inflationary pressures.
The “Art of Taxation” and the Millionaire Flight
Invoking the wisdom of Jean-Baptiste Colbert, the former French Minister of Finance who famously noted that the art of taxation is to obtain the “largest amount of feathers with the least amount of hissing,” Dr. Goss argues that current federal and state tax policies are disproportionately targeting top earners.
Dr. Goss notes that political activists and figures like Representative Alexandria Ocasio-Cortez often argue that billionaire fortunes are evidence of systemic failure rather than accomplishment, fueling calls for higher taxes. The report highlights the stark divide in the U.S. tax framework:
· The Top 0.5%: Taxpayers earning more than $1,000,000 face an average tax rate of 26.8%, accounting for 31.7% of total tax collections.
· The Lower 48.8%: Taxpayers earning less than $50,000 face an average tax rate of 3.2%, accounting for just 2.8% of total collections.
States are increasingly joining the fray. Washington State, for example, previously enacted a historic 7% capital gains tax specifically targeting high earners. At the same time, states like California, Maine, Minnesota, and New York continue to propose steeper wealth and income tax measures.
However, Dr. Goss warns that these tax collection strategies may backfire due to geographic mobility.
“Migration data indicate in the end, tax collections will not match expectations due to geographic mobility, both internationally and domestically,” Goss stated. “Virtually every state that has recently experienced strong net in-migration—such as Florida, Texas, Tennessee, North Carolina, and Georgia—either has no income tax or has been reducing its income-tax rate.”
A Warning from the U.K. Economy
To illustrate the potential downsides of restrictive economic and labor policies, Dr. Goss awarded 3 out of 5 “Goss Eggs” (his metric for poor economic moves) to the United Kingdom.
According to the report, approximately 60% of Britons under 25 are out of work. Nearly half of these idle youths claim a work-limiting disability, driving youth health-related benefits up to £52 billion. Despite these costs—estimated at £125 billion to the broader economy—efforts by U.K. Prime Minister Keir Starmer to tighten eligibility faced intense political backlash. Coupled with an 84% rise in the British minimum wage since 2019, Goss notes these policies have discouraged hiring, allowing the U.S. economy to expand at roughly three times the rate of the British economy since 2023.
Mid-America Manufacturing Gains Amid Labor Friction
On the regional front, Creighton’s May survey of supply managers across nine Mid-America states found that manufacturing sector growth is moving higher, though it remains restricted by a weakening labor market.
Key Manufacturing Highlights:
· Growth Neutral Surpassed: The overall index moved above growth neutral for the fourth consecutive month.
· Job Losses: Despite overall sector expansion, the region lost manufacturing jobs for the 10th time in the past 12 months, with Iowa, Missouri, and Nebraska accounting for 83.3% of those losses.
· Inflation Concerns: The May price gauge climbed to its highest level in almost four years. Approximately 81% of supply managers indicated that geopolitical tensions involving Iran are exerting upward pressure on input prices.
Rural Mainstreet Economy Struggles
While manufacturing showed signs of momentum, the farm-based economy continues to experience a prolonged downturn. Creighton’s Rural Mainstreet Index (RMI)—compiled from a monthly survey of bank CEOs across 10 rural states—sank below growth neutral for the fourth straight month.
Weak grain prices remain the primary constraint, with 56.6% of bank CEOs identifying them as the top negative factor affecting local agricultural conditions. Nearly half (47.8%) of the surveyed bankers reported that overall financial conditions for farmers and ranchers deteriorated from 2025 to 2026.
The National Outlook: Bearish Pressures Ahead
Looking at the broader U.S. economy, Dr. Goss highlighted a mixture of resilient job numbers and troubling inflationary markers heading into the summer of 2026.
Economic Factors At a Glance
Economic Indicator | Latest June 2026 Report Data | Economic Impact |
Job Growth | +172,000 jobs added in May; unemployment at 4.3% | Bullish (Averaging 188,000 over 3 months) |
GDP Growth | NY Fed estimates Q2 GDP at 2.7% (annualized) | Bullish (Stable near-term outlook) |
Consumer Price Index (CPI) | Increased 0.5% in May; up 4.2% over 12 months | Bearish (Inflation remains excessively high) |
Average Hourly Earnings | Expanded by 3.4% over the past 12 months | Bearish (Growth is tracking below the rate of inflation) |
U.S. Budget Deficit | Projected to hit $2.0 trillion (5.8% of GDP) | Bearish (Heavy long-term fiscal strain) |
While Wall Street and various market indicators are pricing in a 50% to 60% chance of a Federal Reserve interest rate hike by the end of 2026, Dr. Goss remains skeptical that the central bank will act at its upcoming September meeting.
“Despite the high probability of a rate hike from investors, I expect no change at that meeting,” Goss concluded. “The economy is too weak for a rate increase.”
