Taxes Have Negligible Effect on Interstate Moves

Tuesday, May 13, 2014 at 1:30 PM by

Moving, but not for lower taxes

Taxes have almost no effect on people’s decisions to move between states, according to a new, comprehensive report from the Center on Budget and Policy Priorities.

Wisconsin lawmakers should not look to tax cuts as a tool to reduce the number of people moving out of state. According to the report,

Policymakers in states like Kansas, Michigan, Nebraska, Ohio, and Wisconsin that have already cut or are considering cutting their income taxes should harbor no illusions that such a move will stem — let alone reverse — their states’ longstanding net out-migration trends.  To the contrary; if deep tax cuts result in significant deterioration in education, public safety, parks, roads, and other critical services and infrastructure, these states will render themselves less — not more — desirable places to live and raise a family.

Here are some highlights about who moves from state to state, and why:

  • Relatively few Americans relocate from state to state, and a miniscule share of them report that they moved because of taxes.
  • People who do move are nearly as likely to move from low-tax states to high-tax states as in the other direction — in some cases, more likely.
  • Primarily low- and moderate-income households, not high-income households, are migrating to states without income taxes
  • Climate is a major driver of interstate migration; people — especially retirees — continue to move from cold, snowy states to Sunbelt states regardless of the tax levels in either the origin or destination state. 

You can read the full report here: State Taxes Have Negligible Impact on Americans’ Interstate Moves.

Tamarine Cornelius

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