Paul L. Caron
Dean




Tuesday, November 24, 2020

Americans Increasingly Are Leaving High-Tax States For Low-Tax States

Cato Institute, Will High‐​Tax “Superstar Cities” Finally Need to Consider — Gasp! — Their Residents?:

As my Cato colleague Chris Edwards documented here a couple weeks ago, interstate migration data from the U.S. Census Bureau indicate that state tax policy affects where Americans, especially wealthy ones, are choosing to live and work. The following charts ...  confirm Chris’ initial impressions: in 2018 there was a strong, statistically significant (p‐​values < 0.01) relationship between (1) personal state tax burdens — as measured by either the Tax Policy Center or the Tax Foundation — and (2) net interstate migration (ratio of inflows to outflows):

Cato 1

Cato 2

The charts paint a pretty clear picture: as a state increases taxes on high earner residents, it tends to lose them to other, lower‐​tax states. As Chris notes, moreover, high state tax levels don’t necessarily mean high quality government services. In other words, many Americans aren’t getting what they pay for.

https://taxprof.typepad.com/taxprof_blog/2020/11/americans-increasingly-are-leaving-high-tax-states-for-low-tax-states.html

Tax, Think Tank Reports | Permalink

Comments

Which they will promptly vote to turn into high tax states.

Posted by: Curmudgeonly Ex-Clerk | Nov 24, 2020 11:08:14 PM

"As a state increases taxes on high earner residents, it tends to lose them to other, lower‐​tax states."

...where they vote for higher taxes. And then complain that their SALT deductions are capped, among other things.

Posted by: MM Classic | Nov 24, 2020 7:09:31 PM