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Americans Are Migrating In Droves To Low-Tax States

Fiscal Policy: There has been a vast, largely unheralded migration in the U.S. over the past decade. Not because of weather, or amenities. But because of taxes.

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Recently, Wallet Hub published a list of states ranked by their tax burden, based on property taxes, income taxes and sales taxes as a share of personal income.

The five states that impose the biggest tax burden on their residents are, in order: New York, Hawaii, Maine, Vermont and Minnesota.

The five states with the lowest tax rates: Alaska, Delaware, Tennessee, Florida and New Hampshire.

Right away there are some obvious similarities between the groups.

None of the 10 highest-tax states has voted for a Republican president in recent elections, for example. On the other hand, only three of the 10 lowest-tax states voted for Hillary Clinton in 2016 — Delaware, Virginia and New Hampshire.

But there's a far more important similarity among high-tax states, and one that should be sounding alarm bells there. They are steadily losing population.

We split the Wallet Hub list in half, and then looked at net migration for all the states from 2007-2016, based on census data. That is, where have people already living in the country moved over those years?

The findings are eye opening.

Between 2007 and 2016, all but three of the 25 highest-tax states lost population. The 5 biggest losers: New York (which lost 1.3 million), California (-928,627), Illinois (-717,445), and New Jersey (-516,326), and Ohio (-346,792).

At the other end of the spectrum, all but five low-tax states gained population. The biggest winners: Texas (1.4 million), Florida (845,239), North Carolina (549,148), South Carolina (361,117), Washington (313,722).

All told, the 25 high-tax states saw a net loss of 4.9 million people to states with lower tax burdens.

We also compared the Wallet Hub ranking with a separate report on states' fiscal condition from the Mercatus Center at George Mason University. Mercatus bases its rankings on measures of state debt, unfunded pension liabilities, cash on hand, rainy day funds, and the like.

Turns out that almost all the high-tax states are also on the list of states in the worst fiscal condition. And vice versa.

One way to look at all this is to conclude that poorly managed states are trying to force taxpayers to cover for their mistakes. But, taxpayers won't stand for it. Which strongly suggests that high-tax states need to set a new course, toward lower taxes and less spending, if they want to stop their population losses.

Consider all this the next time you hear someone claim that the public doesn't care about high taxes, or argues that higher taxes will improve people lives.

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