The latest number of Fortune magazine brings the news that more Fortune 500 companies — the largest American firms ranked by revenues — are now headquartered in Texas than in New York. An Associated Press dispatch datelined Dallas summed it up this way: "The Lone Star State passed New York as home to the most big companies in the latest list compiled by Fortune magazine. Texas now boasts 58 headquarters, three more than New York, the previous No. 1." The wire, not generally known as a font of supply-side economics, went on to report, "Business experts say it's a matter of simple economics — Texas attracts companies with its low taxes."

When these columns last visited this matter, in the February 28, 2006, editorial " Welcome, Alcoa," it was to report that the number of Fortune 500 headquarters in the city had reached 66. It appears that 11 New York-based companies have either slipped down the Fortune list in the past 2 years or moved their headquarters elsewhere. Even the 55 headquarters listed in the city now, while an improvement from the 39 Fortune 500 companies based here in 2002, is a sharp, nearly catastrophic decline from the 140 Fortune 500 companies based here in 1955. Next year's list of New York-based companies may be even smaller; this year's roll includes Bear Stearns, which is being merged out of existence.

New York's top corporate tax rate is 7.5%. Texas doesn't even have a corporate income tax, just a gross receipts tax that, by the Tax Foundation's calculus, works out to the equivalent of a 1.6% income tax. The Tax Foundation ranked New York 48th in the country in business tax climate; Texas was eighth. The AP article carries a list of companies that used to be headquartered in New York but now make their homes in Texas, including Exxon, American Airlines, and J.C. Penney.

The Milken Institute recently ranked the New York City metropolitan area 148th out of the 200 largest cities on a scale that takes into account wages and job growth. Austin, Houston, and San Antonio all ranked higher. Now, we don't want to take a defeatist attitude here. We love New York and would much rather have our own operations headquartered here than in Texas. You didn't see Pope Benedict visiting Houston, and it's the New York Giants, not the Dallas Cowboys, that are the Superbowl champions. But New Yorkers' understandable pride can easily slide into a kind of smug complacency. That's something to guard against with adjustments to public policy.