High-tailing it out of blue states

Travis Brown, the author of the indispensable book “How Money Walks,” shows that two of the leading factors behind this movement of human capital are 1) whether a state has a right to work law (half of the states do) and 2) how high the top income tax rate is in the state. Nine states have no income tax today and they are creating twice the pace of jobs than are high income tax states.

Advertisement

Data from the Internal Revenue Service (IRS) show a similar trend. Each year the IRS issues a migration data report which examines how many tax filers (and dependents) in the year changed their residency and how much income was transported from one state to another. The numbers for the most recent year (tax filing year 2013) are gigantic and put the lie to the claim that interstate migration is too small to matter in terms of the wealth and economic opportunity in one state versus another.

In 2013, Florida gained $8.2 billion in adjusted gross income from out of staters. Texas gained $5.9 billion — in one year. Five of the seven states with the biggest gains in income have no income tax at all: Florida, Texas, Arizona, Washington, and Nevada. New York was again the big loser with another 112,236 tax filers leaving and taking $5.2 billion with them. (So much for those TV ads trying to lure businesses into America’s 2nd highest taxed state with temporary tax breaks. Illinois lost nearly 67,000 tax filers and $3.7 billion of income it can no longer tax.

Join the conversation as a VIP Member

Trending on HotAir Videos

Advertisement
Advertisement
Advertisement