TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, December 12, 2012

Why Will the IRS No Longer Collect Data on Taxpayer Migration From Blue States to Red States?

IRS Logo 2National Review:  An Embarrassing Metric Disappears:  Why Are Government Statistics on Taxpayer Migration Being Discontinued?:

As the din of America’s falling headfirst over the fiscal cliff reverberates across the nation, the Obama administration is quietly killing a key economic metric that tells how, and how many, people are voting with their feet. Since 1991 the IRS has been compiling statistics on filers’ addresses, which the agency’s Statistics of Income division uses to show who is moving into and out of every county and state in the nation. As you’d expect, the IRS also knows the aggregate income levels of those who move. So the movements of the most fundamental productive components of the economy — taxpayers — can be analyzed by journalists and economists, or could until now.

The IRS and the U.S. Census Bureau (which provides technical support in reporting tax migration data) have not made an official announcement as to why the program is being discontinued. So we are left to speculate why such vital economic statistics suddenly got canceled.

Some would be glad if the IRS data simply went away. Blue states with high state and local tax burdens have come out looking bad in recent years. California [, Maryland] and New York have been embarrassed publicly, as a steady exodus is underway from both. ...

While it remains to be seen what the official position of the IRS is, unofficially it is suggesting that the problem lies in coordinating with the Census Bureau. It is asking for comments on how people use the data and how important it is, presumably so that higher-ups at the agencies can reverse their decision if necessary.

The very idea of people voting with their feet is uncomfortable to some politicians. Fortunately, others realize the damage that a declining tax base causes and prefer transparency over attempting to delete statistics that reveal the problem.

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At a guess, the stats are being discontinued because the Service lacks the personnel to do the work. Last time I talked to the stat people at the Service, they couldn't even accept funded work from outside the government due to staffing woes. Nothing I've heard about their staffing levels or efforts in the subsequent years suggests that they've made any improvements.

Posted by: Brian | Dec 12, 2012 6:15:35 AM

Remember also that the Obama Administration removed the Census Bureau from the Department of Commerce supervision in 2009, making his own chief of staff the lead administrator. Its no surprise if political considerations infect the Bureau's activities.

Posted by: Yo Gabba Gabba | Dec 12, 2012 9:13:46 AM

“Everything which might cause doubt about the wisdom of the government or create discontent will be kept from the people. The basis of unfavorable comparisons with elsewhere, the knowledge of possible alternatives to the course actually taken, information which might suggest failure on the part of the government to live up to its promises or to take advantage of opportunities to improve conditions--all will be suppressed. There is consequently no field where the systematic control of information will not be practiced and uniformity of views not enforced.” ― Friedrich A. von Hayek, The Road to Serfdom

Posted by: Woody | Dec 12, 2012 9:23:07 AM

Perhaps, a little more enlightenment would be helpful -- Quotes, The Road to Serfdom by Friedrich A. von Hayek.

Posted by: Woody | Dec 12, 2012 9:38:57 AM

Nothing to see here. Move along...

Posted by: AMTbuff | Dec 12, 2012 11:24:33 AM

A key metric? The only people it is key to are anti-tax/anti-government propagandists such as the National Review.

Posted by: A. Nomus | Dec 13, 2012 6:24:36 AM