15 February 2010
The Pope is Catholic
And in other breaking news, it turns out that people might respond to incentives. As reported in the Wall Street Journal, a study from Boston College's Center on Wealth and Philanthropy finds that as New Jersey has significantly raised income taxes over the last five years, people have left the state. More precisely, wealthy people left the state, leaving it with enormous budget deficits and less charitable giving among its citizens.
This finding is consistent with the recent claims of Adam Smith in his 1776 An Inquiry into the Nature and Causes of the Wealth of Nations that political and economic institutions might have some effect on people's economic activities. Whether Smith was right or not, it is too soon to tell.