NCPA - National Center for Policy Analysis


April 26, 2010

The Christian Science Monitor reported on the correlation between taxes and mobility.  It found that seven of eight states with the biggest population outflows have high state taxes. 

States without income taxes tend to do better, says the Monitor: 

  • Nine states levy no income tax, according to the Tax Foundation: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington State and Wyoming.
  • Of those nine, all but one -- Alaska -- saw more people migrating in than out (within the 50 states) during the period from 2000 to 2008, according to research by the Empire Center for New York State Policy. 

Taxes matter.  So do long-term prospects, says the Monitor: 

  • The consequences of migration can be significant; most people migrating from one state to another aren't rich, but a good number are big-spending consumers, job-creating entrepreneurs or philanthropists.
  • One Boston College study found that New Jersey saw $168 billion in wealth walk out of the state from 2004 to 2008. 

If you live in a high-tax state and are thinking about that moving-van idea, remember to think about not just current tax rates but potential future ones as well.  States in "fiscal peril" from unmet budget obligations may have to raise taxes, says the Monitor. 

Source:  Richard S. Davis, "More Evidence That State Taxes Influence Mobility, Job Creation," Washington Alliance for a Competitive Economy, April 16, 2010; based upon: Mark Trumbull, "Tax day 101: Are some states driving people out with high state taxes?" Christian Science Monitor, April 14, 2010. 

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