"Sunshine tax" or "Paradise tax" is an ironic term used in the United States and Canada to describe the phenomenon that salaries are often lower than the national average, and costs of living higher than the national average, in places that have a desirably temperate climate.
The phenomenon arises because many people are willing to accept lower earnings and higher costs of living to live in a place like Hawaii, California, Florida, Colorado, the Okanagan region of British Columbia, or other places with an attractive climate.
"As most people know, everything seems to cost more in California. The houses are more expensive, the gas and groceries cost more and don’t ask about the cost of daycare. This added cost of living has inspired its own term – the sunshine tax. It is the added cost to live in one of the best climates on earth, where the sun shines almost every day."
The term can also be used to mean anything that has the effect of making costs higher in areas like the Sunbelt. In 2007, the San Diego Union-Tribune calculated the cost of the California sunshine tax at $1.1 billion just for the additional cost of gasoline in the state.
In Hawaii, the same concept is called a "paradise tax". It arises because incomes are lower and the cost of living is higher in Hawaii than on the mainland. It is not an actual tax, but a perceived persistent difference between costs among locations. It is also described as "the price you pay for paradise" or "the cost of living in paradise." Randall W. Roth, in a book entitled The Price of Paradise, listed a number of possible causes, including shipping costs, land availability, and differences in regulation.
- Dixon, John A. & Sherman, Paul B. (1990). Economics of protected areas: a new look at benefits and costs. Island Press. p. 36. ISBN 1-55963-032-9. Retrieved April 11, 2011.
- Peter S. Adler, Joanne Punu, Randall W. Roth and Eric Yamamoto, "What is the paradise tax and what are its implications?" in Randall W. Roth, ed., The Price of Paradise, Volume II, Honolulu: Mutual Publishing, 1993
- Horn, Jonathan (October 26, 2012). "The sunshine tax: Just how much is it?". San Diego Union Tribune. Retrieved 23 January 2014.
- "Intellectual labor is her life's work". Sarasota Herald-Tribune. February 26, 2007. Retrieved April 11, 2011.
- Melcher, Michael F. (2007). The creative lawyer: a practical guide to authentic professional satisfaction. Chicago: ABA Publishing. p. 154. ISBN 978-1-59031-843-0. Retrieved April 11, 2011.
- Jon Manchester (2009-07-09). "Some Fuel for Thought". Kelowna Daily Courier, via Wayback Machine. Retrieved 2011-07-03.[dead link]
- The Sunshine Tax, M is for Money, via Wayback Machine, September 14, 2009
- "Sunshine tax: Drivers suffer the mistakes of politicians". San Diego Union-Tribune. March 15, 2007. Retrieved April 11, 2011.
- Smith, James R. Living and Retiring in Hawaii: The 50th State in the 21st Century