Wednesday, August 27, 2014

More Evidence That State Income Taxes Have Little Impact on Interstate Migration

See link below for chart.

http://www.offthechartsblog.org/more-evidence-that-state-income-taxes-have-little-impact-on-interstate-migration/

Posted by: Michael Mazerov
Aug. 26, 2014

The New York Times’ Upshot blog has published a fascinating set of graphs of Census Bureau data on interstate migration patterns since 1900, bolstering our argument that state income taxes don’t have a significant impact on people’s decisions about where to live.

We plotted the same Census data, which shows which states do the best job of retaining their native-born populations, on the chart below, also noting which states have (or don’t have) a state income tax. Our chart shows that taxes have little to do with the extent to which native-born people leave their states of origin.


Three of the nine no-income-tax states perform very poorly in holding on to native-born residents. Wyoming, Alaska, and South Dakota have three of the nation’s four highest shares of native-born residents who left the state.

Four other no-income-tax states are closer to the middle of the pack. Nevada is almost exactly in the middle of the state rankings, while New Hampshire and Tennessee fall almost equally below and above Nevada; Washington falls within that interval as well. New Hampshire does no better in retaining its native born than its high-tax neighbor, Vermont. Tennessee’s neighbor, North Carolina, has had the highest income tax rates among southern states for the past 20 years but outperformed nearly all of them in retaining its native born, tying for second nationally.

Only two of the nine no-income-tax states are top performers in retaining their native born. Threeof the five states that retain the largest shares of their natives — California, Georgia, and North Carolina — have income taxes, and California and North Carolina in particular have had higher income taxes than their neighbors. Texas and Florida are the only no-income-tax states that rank highly for retention.


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