Taxes and Realignment

Kerby Anderson

March 24, 2008

            In the past, I have talked about political and geographical realignment in America. People don’t stay in one place, and when they move they tell us something about the communities they leave.

            A recent survey by United Van Lines uncovers some interesting patterns of movement in America. An average of 20,000 Americans relocate across state lines each year. The general pattern is for people to move from the Northeast and Midwest to the South and West. But the details are even more interesting than the general trends.

            The survey found that the most reliable indicator of movement was income tax. People tend to move from states with high income-tax rates to states with little or no income taxes. Consider this fact: eight states have no income tax (Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming). Every one of these states gained in net domestic migrants.

            In order to see the phenomenon in action, compare North Dakota to South Dakota. Both states are essentially the same in terms of geography and climate. But they couldn’t be more different in terms of migration. North Dakota lost a greater percentage of citizens than any other state except Michigan. South Dakota ranked in the top twelve states in terms of net domestic migration. People are moving out of North Dakota, but they are moving to South Dakota in droves.  North Dakota has an income tax. South Dakota does not.

            For many years now, demographers have noted the flight of upper income, educated families from California. A major reason for this exodus has been the high taxes in the state. So where are many of these people going? They are moving to neighboring Nevada, which has no income tax.

            Once again we see the realignment of America. People vote with their feet, and it seems that taxes are one of the reasons they leave one state for another state. I’m Kerby Anderson, and that’s my point of view.

By Kerby Anderson Click here for bio and archived articles