Interstate Migration And Tax Competitiveness This blog post examines the relationship between tax competitiveness and interstate migration patterns. in several of our annual updates (most recently here), we observed a strong positive relationship between states with well structured tax codes and those experiencing net inbound migration. Interstate moves are decreasing, despite increasingly disparate state tax systems. only a small percentage of people move to another state in a given year, and that percentage has steadily decreased in recent decades, even while tax differences between states have increased.
Interstate Migration And Tax Competitiveness This article delves into the relationship between tax competitiveness and population movement, leveraging the latest data from the 2025 stci and the american community survey (acs). States with more competitive tax codes, as shown in the figure below, have experienced positive net migration in recent years. Given the years of data and examples showing the same trends, most state level policymakers understand that the competitiveness of their state’s tax code has an impact on interstate migration. but exactly the scope of that impact remains difficult to contextualize. The map below shows the gains and losses in income tax returns filed, the number of residents on those tax returns, and the agi attributable to interstate migration for each state.
Interstate Migration And Tax Competitiveness Given the years of data and examples showing the same trends, most state level policymakers understand that the competitiveness of their state’s tax code has an impact on interstate migration. but exactly the scope of that impact remains difficult to contextualize. The map below shows the gains and losses in income tax returns filed, the number of residents on those tax returns, and the agi attributable to interstate migration for each state. Sometimes taxpayers choose to move to a lower tax state at least in part to reduce their own tax burden. but even those who do not consciously select for lower taxes may be doing so indirectly when they prioritize job opportunities and other factors related to the state’s economic competitiveness. This article will explore how tax competitiveness influences interstate migration, key factors that affect migration decisions, and the broader implications for state economies. The fact that net migration decisions may be affected by tax differentials could be incorporated under the efficiency crite rion, as just one more economic decision that is distorted by taxes. The latest irs data on interstate migration reveal clear trends among high income households. florida leads as the top destination, while illinois struggles with the highest out migration ratio.
Interstate Migration And Tax Competitiveness Sometimes taxpayers choose to move to a lower tax state at least in part to reduce their own tax burden. but even those who do not consciously select for lower taxes may be doing so indirectly when they prioritize job opportunities and other factors related to the state’s economic competitiveness. This article will explore how tax competitiveness influences interstate migration, key factors that affect migration decisions, and the broader implications for state economies. The fact that net migration decisions may be affected by tax differentials could be incorporated under the efficiency crite rion, as just one more economic decision that is distorted by taxes. The latest irs data on interstate migration reveal clear trends among high income households. florida leads as the top destination, while illinois struggles with the highest out migration ratio.
Tax Competitiveness Drives Interstate Migration A Deep Dive The fact that net migration decisions may be affected by tax differentials could be incorporated under the efficiency crite rion, as just one more economic decision that is distorted by taxes. The latest irs data on interstate migration reveal clear trends among high income households. florida leads as the top destination, while illinois struggles with the highest out migration ratio.
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