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New data: Taxes don’t make people move between states

Post on August 4, 2011 by 7 Comments »

Myth-buster alert: A new report from the Center on Budget and Policy Priorities and the N.C. Budget and Tax Center confirm what common sense and our own eyes have long revealed about people’s behavior when it comes to choosing the states they live in.

In a word, the oft-repeated claim that high taxes on the rich will drive them out of your state is baloney. Higher taxes on the rich bring in more revenues, not less.

This is from a BTC news release:

“In 2003, after North Carolina added a high-earners tax bracket, there was actually an increase in wealthy people moving to the state” said Alexandra Forter Sirota, Director of the NC Budget & Tax Center. “This new research confirms what years of experience and previous studies have told us.”

 The report cites numerous examples of research debunking the migration myth and, through case studies, shows how misinformation about the impact of taxes on migration can influence policymakers and the media. Those that support the migration myth often wrongly assume a cause and effect relationship, promote irrelevant findings, and inaccurately measure migration, the report found.

Read the entire report by clicking here.

 

 

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Comments (Closed):5

  1. Alex
    August 4, 2011 at 11:41 am

    Seniors often migrate to low-tax states because they are are mobile. Other folks can’t move because of the lack of available jobs regardless of the tax situation. Texas is a low-tax state , and has created more jobs than all of the other states combined. Go figure !

  2. Rob Schofield
    August 4, 2011 at 11:56 am

    Try reading the report.

  3. Alex
    August 4, 2011 at 12:36 pm

    The report is nothing more than the same old class warfare argument perpetuated by Democrats who want to take attention away from spending cuts. It’s an insane argument that simply tries to attract votes from uneducated people.

  4. Rob Schofield
    August 4, 2011 at 1:53 pm

    Yeah those wonks at CBPP are real fire-breathers, here’s their incendiary, break-out-the-Molotov-cocktails! conclusion):

    “Critics of tax increases (and advocates of tax cuts) have sounded their alarm so loudly and often that their unproven assertion, “if you tax them, they will flee,” has gained credibility among some policymakers and journalists. But, thanks in part to wider access to actual tax return data, independent analysts have shown that the alarmists are wrong. More careful, thorough studies have assembled compelling evidence that the effects of tax increases on migration are, at most, small. In other words: raising taxes won’t spark a large wave of out-migration, and cutting taxes won’t spark a large wave of in-migration.

    Policymakers need this sort of honest and accurate information about the implications of tax increases and tax cuts in order to help them address the very challenging fiscal and economic circumstances that most states continue to face. In the face of a weak economic recovery, continuing state budget shortfalls, and likely cuts in aid to states by the federal government, tax increases can allow states to avert deep cuts in public services such as education and health care. Tax cuts make those spending reductions more severe. Given this difficult scenario, state policymakers should not let false claims about taxes and migration shapes their decisions.”

  5. ohiodale
    August 5, 2011 at 12:52 pm

    This article is slanting the statisics. I live in a high tax state. This state does not just have high taxes on the rich but high income taxes across the board. Ohio also has high business taxes. If you take into account taxes in general not just taxes on the rich there is a direct correlation between the number of people leaving the state. Ohio’s popluation is growing the third slowest in the nation and is projected to remain flat over the next ten years. It is not that the rich are leaving Ohio but the middleclass are leaving. There is a very small percentage of rich in most states so of course the number of rich leaving will be low. Ohio has a major exodus of newly graduated college students due to the lack of jobs which is due to the business non-friendly climate. So high tax directly cause no growth in the labor market due to no new businesses being created. People could not stay here even if they wanted to. Texas has the second highest growth in the nation because it has jobs. Jobs are being created because of low taxes. California has more people leaving the state than entering. California has a high population growth due to illegal immigration and legal immigration but many US born citizens are leaving and this is a fact. NC increased taxes on the weatlhy but has a very business friendly environment that attacks rich people. NJ is losing people because it is not business friendly. There is a different between person income taxes and business taxes. I argue that business taxes kill jobs and force people to leave the state. Person income taxes can be avoided with a good tax attorney. Bottom line it NJ, NY, OH, CA for example are losing people both rich and middleclass and low tax states like TN, TX, FL are all gaining population and jobs.