​In Episode 198 of the Let People Prosper Show, I sit down with Jack Salmon of the Mercatus Center to discuss one of the most important lessons in state policy: people respond to incentives.

Politicians often claim they can raise taxes only on “the rich” without consequences. But high earners, entrepreneurs, and capital are increasingly mobile. When states raise taxes too aggressively, they risk driving away investment, weakening their tax base, and creating deeper fiscal problems over time.

This episode covers tax migration, wealth taxes, Washington State’s new high-income tax, state competitiveness, and why spending restraint is the foundation of sustainable fiscal policy.

The better path is clear: lower and flatter taxes, disciplined spending, economic freedom, and policies that attract people rather than punish productivity.

Watch or listen to Episode 198 on YouTube, Apple, or Spotify, and get show notes at vanceginn.substack.com. 

Originally published on RealClear Markets.

The Trump administration has opened a Section 232 national security investigation into imported medical products. It is being sold as a supply-chain resilience effort. But it is a tax on Americans that raises healthcare costs for patients.

The Commerce Department’s probe covers medical equipment, personal protective equipment, and a wide range of health technologies used every day in hospitals and clinics. The scope is so sweeping that it now threatens robotics and medical devices—the tools modern medicine depends on.

Supply-chain vulnerabilities are real. COVID exposed weaknesses, especially for critical supplies. But tariffs are the wrong tool. They do not build domestic capacity on a meaningful timeline and impose immediate costs on families.

Tariffs are taxes. They are not paid by foreign governments. They are paid by American importers and passed through to hospitals, providers, insurers, employers, and families. That is why tariffs are a particularly bad way to raise tax revenue: they hide the tax, distort decisions, and raise costs across the economy.

President Trump has highlighted the revenue appeal of tariffs in his State of the Union remarks, even suggesting tariffs could replace other taxes. But “revenue” from tariffs is money taken from Americans through higher prices at home. There is nothing conservative about a hidden tax that hits working families hardest.

Healthcare is the worst place to run this experiment. Medical supply chains are global because they rely on specialization, scale, quality controls, and reliable access to components. Even when a device is assembled in America, key parts are often sourced internationally. A tariff hits finished devices and the inputs that make them. When you tax the supply chain, you tax the care.

Hospitals cannot simply stop buying essential supplies and equipment. Providers cannot delay purchases of critical tools without affecting patient care. Higher costs do not disappear. They get passed through as higher charges, higher negotiated rates, higher premiums, and higher out-of-pocket bills.

The supply-chain mechanicsbehind this pass-through are complex. When procurement costs rise or supplies tighten, healthcare systems absorb strain, and patients feel it downstream. Tariffs are not an abstract policy lever. They land in exam rooms and operating rooms.

A large hospital system that spends hundreds of millions of dollars each year on devices and supplies can face millions—or tens of millions—more in additional costs under broad tariffs. Rural and safety-net hospitals operating on thin margins get squeezed first. The people harmed first are the people with the least ability to pay more: seniors on fixed incomes, families with high deductibles, and patients who cannot absorb another surprise bill.

Tariffs also weaken domestic competitiveness in the name of strengthening it. Medical devices operate in a globally integrated market with complex sourcing and distribution. Taxing key inputs does not make American manufacturers stronger. It raises their costs, reduces investment flexibility, and makes the sector less nimble.

If policymakers want stronger supply chains and more domestic production, they should start with the barriers at home that actually deter investment: regulatory delays, compliance burdens, and uncertainty that slow expansion. They should diversify sourcing through trusted allies and redundancy rather than pretending the U.S. can reshore everything overnight without major cost increases. 

Resilience comes from competition and flexibility, not from a blunt tax that hits every hospital purchase order immediately. Free trade remains the path to prosperity because it lowers costs, expands choice, and strengthens the economy's productive capacity, including in healthcare. The same principle applies to medical tools.

If this Section 232 investigation results in more tariffs, Washington will be taxing pacemakers, insulin pumps, imaging machines, and the supplies that keep hospitals running. That does not make America healthier or safer. It makes healthcare more expensive—right when families can least afford it.

Originally published on Substack. 

​Americans are still voting with their feet, and lawmakers should stop pretending otherwise.

The newest IRS migration data, the latest Tax Foundation migration analysis, the new Fraser Institute economic freedom rankings, and the latest ALEC-Laffer competitiveness index all point in the same broad direction: people and income continue moving toward states with lower taxes, stronger economic freedom, and more competitive policy climates.

That pattern is not random. It reflects incentives, and it carries major implications for tax reform, spending restraint, and long-run state competitiveness.

According to the Tax Foundation’s review of the IRS interstate migration files for tax years 2022 to 2023, 27 states posted a net gain in income tax filers from interstate migration.

The biggest winners were Texas (+56,473), Florida (+55,359), North Carolina (+39,118), South Carolina (+29,214), Tennessee (+24,104), Arizona (+17,316), Georgia (+14,671), and Colorado (+11,341).

The biggest losers were California (-100,397), New York (-71,987), Illinois (-28,609), New Jersey (-19,370), Massachusetts (-15,378), Maryland (-13,628), and Pennsylvania (-12,095).

This is not just a headcount story. It is an income story too.

The same Tax Foundation analysis found that Florida posted the largest net adjusted gross income gain from interstate migration at about $20.6 billion, followed by Texas at $5.5 billion. Other major winners included South Carolina, North Carolina, Arizona, and Tennessee, each with large AGI gains. On the losing side, California posted a net AGI loss of about $11.9 billion, New York about $9.9 billion, Illinois about $6.0 billion, Massachusetts about $3.9 billion, and New Jersey about $2.55 billion. That matters because states do not just lose people when they lose migration battles. They lose tax base, investment, entrepreneurship, and future growth.

Taxes are not the only factor in where people move. Housing costs matter. Jobs matter. Crime matters. School quality matters. Regulation matters. But tax policy still matters enough that lawmakers ignore it at their own peril. The Tax Foundation’s migration work found a clear negative relationship between top marginal state individual income tax rates and net per-capita migration. That does not mean taxes explain every move. It does mean tax competitiveness remains an important part of the story.

The broader policy environment matters too, and this is where the latest Fraser Institute Economic Freedom of North America report sharpens the case.

In the U.S. subnational index for 2023, New Hampshire ranked 1st, Tennessee 2nd, South Dakota 3rd, Texas 4th, Idaho 5th, Florida 6th, North Carolina 7th, and Georgia 8th. Near the bottom were California 47th, Hawaii 48th, New York 49th, and New Mexico 50th.

Fraser also reports that from 2014 to 2023, population in the freest U.S. states grew 17.7 times faster than in the least-free states, while employment in the freest states grew about twice as fast. In plain English, Americans are not just moving toward lower taxes. They are moving toward better policy ecosystems overall.

The new ALEC-Laffer Rich States, Poor States 2026 report reinforces that point from a different angle.

Its forward-looking Economic Outlook Rankings place Utah 1st, Tennessee 2nd, Idaho 3rd, North Carolina 4th, Arizona 5th, Florida 10th, Texas 13th, and Georgia 14th, while California 47th, Vermont 48th, New Jersey 49th, and New York 50th sit at the bottom.

ALEC’s backward-looking Economic Performance Rankings for 2014–2024 also show many migration winners near the top, including Florida 1st, Arizona 2nd, Idaho 3rd, Utah 4th, South Carolina 6th, Texas 7th, North Carolina 9th, and Georgia 11th.

These rankings are not perfect, and no single index explains everything. But they tell a consistent story: states with stronger growth-oriented institutions tend to outperform over time.

This is one reason the flat-tax revolution matters. As the Tax Foundation’s flat-tax review has highlighted, the last several years have seen a remarkable wave of states adopting flatter income taxes and lower rates. North Carolina was an earlier mover, and as of January 1, 2026, its individual income tax rate fell from 4.25 percent to 3.99 percent. South Carolina has now enacted a path to zero, and several other states have adopted flat taxes or set future triggers for more reform. That kind of reform matters because it improves incentives at the margin and sends a broader message: this state wants to be more competitive, more pro-growth, and less punitive toward work and investment.

Too many lawmakers in high-tax states still explain away out-migration as a weather story, a retirement story, or a temporary post-pandemic adjustment. That is wishful thinking.

If taxes and economic freedom did not matter, states would not keep cutting rates, flattening tax codes, and competing harder for residents and employers. If policy did not matter, the winners and losers would look much more random than they do.

Instead, the same broad pattern keeps appearing: lower-tax, more economically free states keep attracting people and income, while higher-tax, less economically free states keep losing both. That should be a warning to policymakers who think they can fund larger budgets forever on a shrinking base.

The deeper lesson is not merely “cut taxes.” It is “build a more competitive institutional framework.”

That means lower and flatter taxes. It means spending restraint so tax relief lasts. It means broader and simpler tax bases instead of carveouts and complexity. It means reducing unnecessary regulation, making housing more attainable, protecting work and entrepreneurship, and creating a governing climate that trusts people more than bureaucracies.

The Fraser and ALEC rankings are not identical, but both underscore the same truth: growth tends to follow policy environments that leave more room for people to work, invest, hire, build, and move up.

That is why I keep coming back to the same North Star: let people prosper.

If lawmakers want a reality check on whether their policies are working, they should look at where people are choosing to go, where income is flowing, and where opportunity is expanding. Americans are sending a clear signal. The question is whether policymakers are willing to hear it.

Three Takeaways for Policymakers

1. Americans are still voting with their feet.

The latest IRS migration release and Tax Foundation analysis show strong net filer gains in states like Texas, Florida, North Carolina, South Carolina, and Tennessee, while California and New York remain major losers.

2. People are moving toward broader economic freedom, not just lower taxes.

The latest Fraser Institute report ranks Texas 4th, Florida 6th, North Carolina 7th, and Georgia 8th in U.S. economic freedom, while California and New York rank near the bottom. The ALEC-Laffer index tells a similar story on both outlook and performance.

3. Competitive tax reform should continue, but it should be paired with broader reform.

Flatter taxes and lower rates help, but durable growth also requires spending restraint, a lighter regulatory touch, and a policy environment that rewards work, investment, and entrepreneurship.

The migration data do not tell us everything. But they tell us enough.

People are moving toward opportunity, affordability, lower taxes, and more economic freedom. States that want to grow should take the hint.

Thank you for reading and for sharing my work. If this added value to your week, please pass it along to a policymaker, staffer, journalist, or friend who should read it.
​
If your organization, state, or team needs help thinking through tax reform, spending restraint, competitiveness, or broader pro-growth policy, I would be glad to help through Ginn Economic Consulting. I am also glad to speak at events, join interviews and podcasts, and meet with policymakers across the country.

​Economic prosperity is built over time—through growth, investment, and innovation. But too often, policy is driven by short-term political incentives that prioritize immediate wins over long-term results.

In this episode of This Week’s Economy, we examine how public choice economics helps explain why policymakers favor redistribution, regulation, and targeted benefits that deliver quick, visible outcomes—while ignoring the longer-term consequences.

The result is a pattern of policies that raise costs, distort markets, and limit opportunity.

This episode explores:
• The incentives driving political decision-making
• The “short-term policy trap” and its economic consequences
• Why redistribution cannot replace growth
• Real-world examples of policies that backfire over time
• A better framework for long-term, pro-growth policy

The stakes are clear: if we continue prioritizing short-term gains, we risk slower growth, higher costs, and fewer opportunities for future generations.

The solution is equally clear: focus on policies that support long-term prosperity—sound fiscal discipline, free markets, and incentives aligned with growth.

📖 Subscribe and learn more: https://vanceginn.substack.com

Originally published on Substack. 

States across the country are learning the same lesson: tax triggers can be helpful, but they are not enough.

A tax revenue trigger can lower tax rates when collections come in strong. Good. That is better than letting government pocket every extra dollar forever.

But if lawmakers do not also restrain spending, those tax cuts will always be vulnerable to the next downturn, the next budget scare, or the next politician who thinks every extra dollar flowing into the capital belongs there.
​
That is why the bigger issue is not whether tax triggers are good or bad. It is whether they rest on a strong enough foundation to last.

​North Carolina Is A Good Example

North Carolina has built one of the better tax-reform records in the country, and it should not lose its nerve now.

The state’s flat individual income tax rate fell from 4.25 percent in 2025 to 3.99 percent in 2026. The latest consensus revenue forecast says revenues in both FY 2025–26 and FY 2026–27 are high enough to trigger two more cuts, taking the rate to 3.49 percent in 2027 and 2.99 percent in 2028.

The same forecast puts General Fund revenue at about $35.079 billion for FY 2025–26 and $34.720 billion for FY 2026–27. That is real, pro-growth reform, and North Carolina should stay the course.

But tax triggers need restraint if they are going to last.

The Real Problem Is Spending

North Carolina does not have a tax-cut problem. It has a spending problem.

The 2025 state funds budget is $7.0 billion higher than it would have been if spending had grown only at that benchmark over the past decade, and cumulative excess state-funds spending over the decade reached $16.9 billion.

On the all-funds side, ATR estimates the 2025 budget is $20.2 billion higher than that sustainable path, with cumulative excess all-funds spending of $72.6 billion from 2016 to 2025.

Those are not abstract numbers. They are a sign that government has been growing faster than the average taxpayer’s ability to support it.

What This Cost Families

The family cost matters because that is where budget policy becomes real life.

I calculate that in the 2025 budget alone, excessive state-funds spending above population growth plus inflation cost a family of four $626. On the all-funds side, the 2025 budget cost per family of four was $1,806.

Over the full decade from 2016 to 2025, ATR estimates the cumulative cost per family of four was $6,023 on the state-funds side and $25,934 on the all-funds side. That is not a revenue shortage. That is what happens when government grows too fast for too long.

Why This Matters For Tax Reform

This is why I have argued before that tax reform without spending restraint is a mirage. Lower tax rates are real, and they help workers, families, entrepreneurs, and investors.

But politically, they are only as durable as the budget discipline behind them. When revenues soften, and they always eventually do, critics of tax relief will say the cuts went too far. What they usually will not say is that the real problem was letting spending balloon when times were good.

That is the weakness of tax revenue triggers by themselves.

A tax revenue trigger says: cut taxes if collections hit a target. Better than nothing.

TBut if the spending side remains loose, those cuts sit on a shaky foundation. The first rough patch in the economy gives lawmakers an excuse to say the tax relief was irresponsible, when the deeper problem was a budget that never had enough restraint in the first place. That is why tax triggers need restraint.

A Better North Star

The stronger model is what I would call a surplus trigger.
​
The idea is straightforward: tie spending growth to a maximum of population growth plus inflation and treat that as a hard ceiling, not a target. Then, if revenues exceed what is needed to fund that disciplined budget, route the resulting surplus automatically into lower tax rates.

That changes the whole incentive structure. It tells lawmakers that excess revenue does not belong to government by default. It belongs back with taxpayers unless a compelling case is made otherwise. That is much more durable than relying on nominal revenue growth alone.
​
It is also consistent with my broader work on Responsible State Budgets Across the U.S. and conservative budgeting in Iowa, where the same lesson applies: spending restraint should come first, and tax relief should be the reward for discipline.

North Carolina Should Finish The Job

North Carolina has done a lot right. Its tax reforms have made the state more competitive, and it should keep the scheduled cuts. But if lawmakers want those reforms to last, they need stronger fiscal guardrails underneath them.

That means keeping the tax-cut path. It also means imposing firmer spending discipline so future tax relief rests on actual surpluses created by restraint, not just on good revenue years that can come and go. The state’s latest forecast is encouraging. The spending record is more cautionary. Both are true at the same time.

That is the real lesson here.

Tax relief built on spending restraint is durable. Tax relief built on spending growth is fragile.

Three Takeaways for Policymakers

1. Keep the tax cuts.

North Carolina’s latest forecast supports reductions to 3.49 percent in 2027 and 2.99 percent in 2028.

2. The real threat is overspending.

ATR says North Carolina overspent by $16.9 billion on the state-funds side and $72.6 billion on the all-funds side from 2016 to 2025 relative to population growth plus inflation.

3. Make surplus triggers the North Star.

Revenue triggers are a good start. But a hard spending ceiling plus automatic tax relief from real surpluses is a more durable framework for reform. That is how reform lasts. That is how taxpayers win.

The figure below shows how the growth in Texas’ biennial budget was cut by 13.3% from 12% to 10.4% after the creation of the Conservative Texas Budget in 2014, which first influenced the 2015 Legislature when crafting the 2016-17 budget, along with changes in the state’s governor (Gov. Greg Abbott), lieutenant governor (Lt. Gov. Dan Patrick), and some legislators. ​The 10.4% average growth rate of biennial appropriations since 2016 was above the 7.9% biennial average rate of population growth plus inflation, which was driven substantially higher after the latest 2024-25 budget, which was well above this key metric (previously, the biennial budget growth was 5.2% compared with 9.3% in the rate of population growth plus inflation). ​

Making matters worse, the growth of the budget has increased substantially faster than population growth plus inflation in Texas since Republicans gained their first trifecta in control of the Governor's mansion, Senate, and House in 2003. Their first budget was in 2004-05, which the work of House Appropriations Chairman Talmadge Heflin (one of my wonderful mentors) helped address by closing a budget shortfall without raising taxes through spending cuts and restraint. The figure above highlights how the budget has grown nearly 30% faster than the average taxpayer's ability to pay for it over this period. The figure above illustrates how these excesses have accumulated over time, resulting in massive spending and substantial tax burdens on Texans. There is more work to do!​

Sustainable Budget Work With Other States, ATR, and CFGF

When I returned to the Texas Public Policy Foundation in May 2020, I sought to regain a sense of freedom during the COVID-19 pandemic and be closer to family. I started an effort to work on this sound budgeting approach with other state think tanks. This led me to work with many fantastic people who are trying to restrain government spending at the state, local, and federal levels. Here are my latest data on the federal and state budgets as part of American for Tax Reform's Sustainable Budget Project and a recent publication by the Club for Growth Foundation.

​From 2016 to 2025, the following happened:

Federal spending skyrocketed 81.9% to $7.0 trillion in 2025, which is two and a half times faster than the 32.4% increase in population growth plus inflation.

• If Congress had restrained spending to this sustainable growth rate:
  • The federal government would’ve spent $1.9 trillion less in 2025.
    
  • The national debt would’ve increased by less, with a $2.7 trillion increase instead of $15.6 trillion.
    
  • Cumulative debt since 2006 would have risen by less, by $4.2 trillion rather than $23.2 trillion.
• That’s trillions of dollars that could’ve stayed in people’s pockets or been invested in future prosperity, not siphoned off to fund bloated bureaucracies and waste.

Aggregate state spending, by the 50 state governments, excluding funds received from the federal government, increased by 65.8% during that decade to $2.1 trillion. 

• Had states’ spending grown by the maximum rate of 32.4% in population growth plus inflation from 2016 to 2025, they:
  
  • Would have spent $419 billion less in 2024.
    
  • Would have had cumulative spending be $1.8 trillion less over that decade, leaving more money in people’s pockets.​

Result: When combining federal and state overspending, Americans lost over $3.1 trillion in 2025 and more than $20.8 trillion in excess taxes and debt across the decade.

Originally published on Substack.

Most Americans do not wake up thinking about regulation. They think about grocery bills, utility costs, insurance premiums, housing prices, the permit that takes too long, the form that makes no sense, and the feeling that everything in life is harder and more expensive than it should be.

That is regulation.

It is not just some abstract fight in Washington. It shows up in the prices we pay, the jobs that never materialize, the businesses that never open, the homes that never get built, and the choices we are no longer trusted to make for ourselves.

The latest Ten Thousand Commandments 2026 by the Competitive Enterprise Institute’s initial estimates that federal regulation imposes at least $2.1 trillion in annual compliance costs and economic effects, while noting that the true burden is likely much higher.

That is not some rounding error.

CEI estimates that the average U.S. household pays about $15,859 per year in a hidden regulatory tax. That amounts to about 15 percent of income and 20 percent of household expenses.

The report says that burden exceeds what households spend on health care, food, transportation, entertainment, apparel, services, and savings. Only housing costs more. In other words, regulation is not just a business problem. It is one of the largest costs in everyday American life.

The Hidden Tax

Politicians love to talk about taxes because taxes are visible. You see the withholding. You file the return. You know the government took your money.

Regulation is more deceptive. It usually does not arrive as a bill from the IRS. It arrives as higher prices, fewer choices, more delays, lower wages, and more time wasted navigating bureaucracy.

Businesses absorb the compliance burden first, but they do not keep it. It gets passed through to workers, consumers, and investors. That is why regulation often acts like a tax that was never openly debated and never honestly priced.
​
CEI notes that its $2.153 trillion regulatory burden rivals the $2.426 trillion collected in individual income taxes in 2024 and stands at more than four times corporate income tax collections.

That should alarm anyone who cares about affordability.

Rules Replacing Laws

This is not just an economic problem. It is a constitutional one.

In 2025, federal agencies issued 2,441 final rules while Congress enacted just 133 laws. That means agencies issued rules at a pace of 18 for every law passed by elected lawmakers.

CEI’s Unconstitutionality Index shows the 10-year average is 22 rules for every law. That is not self-government in any serious sense. That is bureaucratic lawmaking replacing representative lawmaking.

And that replacement has been building for decades. Since 1976, federal agencies have issued 223,623 final rules. Since 1993, when CEI first began publishing this report, agencies have issued 126,536 final rules.

Washington is governing more and more of American life through agency command rather than legislative accountability.

Paperwork Is Policy Too

A lot of regulation does not even look dramatic. It looks like paperwork.

It is reporting, disclosure, certification, duplication, delay, and procedural nonsense that drains time and energy out of productive life. CEI highlights 10.5 billion paperwork hours from the federal government’s own accounting, the equivalent of nearly 14,983 human lifetimes.

That is not protecting the public. That is pulling talent and time away from work, production, and family life to feed bureaucracy. This is how regulation encumbers daily life. It turns permission into the default and freedom into the exception.

Real Progress, Limited Progress

The report does show meaningful progress in 2025. Agencies issued 2,441 final rules, the lowest tally on record. The Federal Register dropped 43 percent, from 106,109 pages in Biden’s final year to 60,917 pages in 2025.

The administration also used the Congressional Review Act aggressively, signing 22 resolutions of disapproval, more than all prior enacted CRA resolutions combined. OMB’s year-end accounting under Executive Order 14192 also reported 646 deregulatory actions and five significant regulatory actions, for a ratio of 129-to-1.

Good. Keep going.

But let’s not oversell it. CEI is clear that the broader aggregate burden is essentially unchanged because modest annualized savings are being offset by inflation applied to the legacy regulatory state. It also notes that Congress still has not delivered the structural reforms needed to make deregulation durable.

A good year of executive cleanup does not erase a century of delegated power, embedded mandates, and administrative sprawl.

What Needs to Happen

That is why the real fix has to be structural, not episodic.

Congress should reclaim authority over major rulemaking. A regulatory budget would force agencies to live under a cap just as lawmakers are supposed to do with fiscal spending.

The REINS-style approach of requiring congressional approval for major rules would restore accountability. Rules should sunset unless affirmatively renewed. And the White House should be required to produce honest aggregate cost estimates under the Regulatory Right-to-Know framework instead of letting the biggest hidden tax in America remain half-accounted for.

If Congress wants less regulation, it should stop outsourcing lawmaking to agencies and then pretending not to notice the cost.

Three Takeaways for Policymakers

1. Regulation is a hidden tax on everyday life.

Federal regulation costs at least $2.153 trillion annually, or about $15,859 per household.

2. Bureaucrats are making too much law.

Agencies issued 18 rules for every law Congress passed in 2025, and the 10-year average is 22-to-1.

3. Durable reform requires Congress, not just presidents.

A lower rule count is good, but only structural reforms like a regulatory budget, congressional approval of major rules, and sunsetting can truly rightsize Washington.

The administrative state does not just live in Washington. It lives in your prices, your paperwork, your delays, your shrinking choices, and your lost opportunities.
​
That is why this fight matters. Let people prosper!

Taxes are a certainty—but the structure of the tax system is a policy choice.

In Episode 159 of This Week’s Economy, I explore how America’s current tax code affects economic growth, household finances, and long-term opportunity. As Tax Day approaches, this episode takes a step back to evaluate whether our system is helping people prosper—or quietly holding them back.

We cover the hidden costs of taxation, the importance of simplicity and broad-based reform, and why better tax policy—paired with spending restraint—is essential for sustained economic growth.

🎧 Watch now and subscribe
📩 Show notes: vanceginn.substack.com