Forty-three million Americans moved from one state to another between 1995 and 2010 – about one-seventh of Americans.

It’s good that we can move! Moving provides one of the few limits on the megalomania of state bureaucrats.

Americans have moved away from high-taxed, heavily regulated states to lower-taxed, less-regulated states. Most don’t think of it as a political decision. They just go where opportunities are, and that usually means where there’s less government.

They’re leaving my state, New York, in droves. California, despite its great weather, also lost people, and wealth. Other biggest losers were Illinois, New Jersey and Ohio. Continue reading →

Introduction

There’s no question that Minnesota’s tax policies directly impact economic growth and opportunity in the state.  There is, however, great debate over whether Minnesota’s current tax policy and the proposals being considered in St. Paul promote or harm economic growth.  Those who favor a higher tax rate argue Minnesota needs more revenue to fund the education and infrastructure necessary to sustain economic growth.  Advocates for lower taxes argue Minnesota needs low rates to make Minnesota an attractive place to invest, work and grow a business.

Like most economic questions, making the direct connection between state tax policy and economic growth is difficult. As William McBride—chief economist at the Tax Foundation—admits, “the economy is sufficiently complex that virtually any theory can find some support in the data.”

Though data can deliver mixed messages, data from the Internal Revenue Service (IRS) point to one clear and worrisome fact: Minnesotans and their wealth are moving to Southern and Western states.  Between 1995 and 2010, an average of $340 million in income—based on 2010 dollars—moved each year from Minnesota to other states—a movement totaling more than $5 billion over 15 years.   The states that on net receive the most Minnesota income tend to be low tax states such as Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas, and Washington.

While people move for all sorts of reasons, a closer look at this data strongly suggests that state tax policies are influencing movement to and from Minnesota.  The implications for current proposals to raise Minnesota tax rates is clear: Higher taxes will likely lead to even more wealth moving to other states.

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As many Americans breath a sigh of relief  now that April 15 has come and gone, many are still burdened with the filing of looming state income taxes.  The weight of the state income tax burden has been put into real terms with a new user-friendly, interactive mapping tool called How Money Walks.  How Money Walks (also available as a mobile app) exposes the movement patterns of personal income among the states, mapping out the money moving from states with high income tax rates to states with littler or no income tax. Pulling its data solely from the Internal Revenue Service records from 1995-2010, How Money Walks empowers citizens with the comparative knowledge of income migration from county all the way to the state level.  In an exclusive interview with creator and author Travis H. Brown, he highlights how How Money Walks is applicable to all Americans:

Watchdog Wire: Your project How Money Walks maps the massive movement of $2 trillionin personal income taxes between the states from 1995-2010.  How does $2 trillion walk and why did you select personal income tax as a useful metric for this migration?

Travis H. Brown: Personal income is our most mobile resource.  Our disposable income, less the price placed upon work in the form of income taxes, feeds all of our potential to survive, consume, invest, and own assets.  By making the Internal Revenue Service taxpayer file easy to navigate, the How Money Walks application allows taxpayers to see what has been happening within any community.

 

Read more HERE