How Miami ‘Caught a Wave’ and Became the Hot New Tech Hub

A business-friendly mayor helped. So did the quick Covid reopening and the loss of SALT deductions

By Mario Loyola. Mr. Loyola teaches environmental law at Florida International University and is a senior fellow at the Competitive Enterprise Institute. Excerpts:

"The city leads the nation in tech-job growth and migration and is among the top 10 U.S. cities for venture-capital investment. CrunchBase news reports that Miami-based companies raised $2.6 billion in capital in 2021, a more than 20-fold increase from $128 million in 2018."

"A broader trend is also at work: intensified competition among states. Progressives have long sought to use federal power to neutralize the competitive advantages of states with low levels of regulation and taxation. A poisonous example is the federal income-tax deduction for state and local taxes, or SALT. Part of the tax code for more than a century beginning in 1913, the deduction protected high-tax state governments by reducing their residents’ incentive to move elsewhere, while punishing low-tax states by transferring part of their responsibly forgone revenue to profligate neighbors.

Thus the 2017 tax reform, which capped the SALT deduction at $10,000, was historic. By exposing high-income workers in blue states to the full brunt of their states’ levies, it restored the natural incentive to move to places like Florida and Texas. In-migration was already increasing when Covid hit."

"California, Illinois and New York. Those same states stuck to oppressive Covid-19 mandates, softened their crime policies, and pushed woke indoctrination in schools. Gov. Ron DeSantis went in the opposite direction, defying what he called the “woke mob,” reopening quickly, and declaring Florida “the freest state in these United States.”

The 15 months between April 2020 and June 2021 saw a net migration of nearly 300,000 people to Florida, more than any other state. Among those earning more than $200,000 a year, four times as many people moved to Florida as to New York in 2019 and 2020. Florida led the country in income migration, gaining more than $20 billion in net income from 2019 to 2020, while California and New York each lost almost as much."