One of the main arguments offered by those who would cut taxes in ways that savage pubic goods like schools and infrastructure is that people vote with their feet – they migrate to states with low or no state and local taxes. Turns out this is not true. Not even a little true.
Recent research by the Center on Budget and Policy Priorities shows taxes have little if any effect on Americans’ migration.
Americans are homebodies. Nearly 70% of Americans reside in the state in which they are born. Annually, only 1.5 to 2% of Americans move to another state. And of those only a small portion cite taxes as a reason for moving.
The vast majority cite family, work, and climate as their reasons. Only 3% of potential interstate movers in a recent national survey mentioned taxes as a reason for moving.
People are as likely or more likely to move from low-tax states to high-tax states. For example, in the past two decades more households moved from Florida, a state with no state income tax, to 11 states with a state income tax.
Low- and moderate-income households are more likely to make interstate moves. Implied in the conventional wisdom about taxes and migration is the implication that high-income households seek to take their money to states where it will not be taxed as much. Again, not true.
For example, of those who recently moved from New York (a state with a state income tax) to Florida (no state income tax), three times as many were low- and moderate-income households as were higher-income households. Almost all the low- and moderate-income households cited work and family as reasons for moving.
Climate matters. As residents of the Midwest and Great Plains we can testify to our often brutal winter weather and the almost daily desire in the winter to pack and move to a warmer climate. Since the 1990s, warmer weather states experienced in-migration while colder weather states generally experienced out-migration.
This pattern holds whether it’s in-migration to Florida and Texas (states without a state income tax) or Arizona and North Carolina (states with a state income tax) or out-migration from South Dakota and Alaska (states without a state income tax).
As your state has debates over tax policy you will likely hear this red herring argument from those willing to sacrifice investments in public goods to promote an unfair tax system. Don’t let them get away with it. Make sure the facts are known.
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