This all started with the Laffer Curve, which actually made sense.

The argument goes that when you have a punitively high tax rate on economic activity, economic activity goes down because nobody can take a profit on it. So, the argument goes, you lower the taxes to where they're no longer punitive, a profit margin appears, and economic activity goes up, actually raising tax revenues.

In other worse, the whole idea about lowering taxes boosting economic activity originally applied to a very narrow situation that, frankly, we don't see a whole lot of these days.

Since, the argument has been broadened and misappropriated to argue that lowering taxes boosts economic activity.

The idea that if you get rid of the state income tax rich people will relocate here must count as one of the grandest distortions yet of what was, originally, a fairly sound argument.