Americans Continue to Flee High Tax States for Low Tax States

As radical leftists call for higher and higher taxes at both the state and federal level, Americans already frustrated by current tax rates are fleeing to low or no income tax red states.

In fact, the problem has gotten so bad that even the government is taking note of it. The IRS’s tax migration data, for example, shows there were 8 million migrant tax returns representing about 14 million total people for 2018-2019. That means about 14 million people moved.

And those that moved were primarily in higher income brackets, with the report stating that:

Overall, the adjusted gross income (AGI) average for returns identified as nonmigrant was higher ($88,420) than for returns classified as migrant ($69,878). For the two youngest age groups, under 26 and 26-under-35, there was a minor difference between the AGI average for nonmigrant and migrant returns. By comparison, for the middle two age groups, 35-under-45 and 45-under-55, the AGI average for nonmigrant returns was the higher of the two, but for the oldest two age groups, 55-under-65 ($119,375) and 65 and over ($96,512), the average AGI for migrant returns was the higher of the two.

That income figure indicates that one of the main reasons for migration might have been state taxes, with high-income Americans fleeing higher-tax blue states for red states that lay claim to a much smaller portion of their income.

RealClearMarkets confirmed that migration from high-tax blue states to low or no income tax red states in a recent article, stating that:

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The five states that lost the most taxpayers are not exactly known for fiscal restraint. New York, California, Illinois, New Jersey, and Massachusetts lost, on net, 219,937 taxpayers and over $28 billion in adjusted gross income (AGI). On average, these states have a state-local effective tax rate of 11.8 percent.

The five states that gained the most taxpayers, on the other hand, are all low-tax states — in fact, three of the five have no state income tax. Florida, Texas, Arizona, North Carolina, and Washington state gained, on net, 194,340 taxpayers and $28.9 billion in AGI, all while averaging a state-local effective tax rate of just 8.96 percent. Unsurprisingly, Florida is the big winner here, adding $17.5 billion in AGI to its tax base alone.

New York, for example, has income tax rates ranging from 6.49%-8.82% for those making more than $80,650, with New York City imposing an additional tax burden on its residents. California, Illinois, New Jersey, and Massachusetts having similarly high income tax rates.

Florida, Washington state, and Texas have no income tax. North Carolina has a flat income tax rate of 5.25%. Arizona’s income tax rate is, at its highest, about 4.5%. Though those states utilize other forms of taxation, the tax burden they overall place on residents is overall much lower than the tax burden faced by residents of the states (all run by Democrats) with the highest level of taxation.

Americans are smart enough to recognize that, and, though the reason for migration is hard to ascertain, it’s probably one of the driving reasons for migration from New York, California, Illinois, New Jersey, and Massachusetts to Florida, Texas, Arizona, North Carolina, and Washington state. The Tax Foundation, for example, declares that:

While it is difficult to measure the extent to which tax considerations factor into individuals’ moving decisions, there is no doubt that taxes are important in many individuals’ personal financial deliberations.

That same report confirmed the trend of people moving from high tax states to low tax states, reporting that:

The 2020 National Movers Study shows Idaho, South Carolina, Oregon, South Dakota, and Arizona as the states with the highest proportion of inbound moves. New Jersey, New York, Illinois, Connecticut, and California saw the highest proportion of outbound migration.

So, unless the blue states seeing high levels of out-migration either cut their tax rates or are saved by the Democrat attempt to raise the state and local tax deduction, it’s likely that the migration trend will continue, even if the states migrated to or from change slightly from year to year.

By: Gen Z Conservative, editor of Follow me on Parler and Gettr.

Notice: This article may contain commentary that reflects the author's opinion.