KEY POINTS:
- Higher marginal tax rates are correlated with greater outmigration in 2018.
- New York and California had among the highest marginal tax rates and experienced the largest net outmigration in 2018.
- Texas and Florida, states without any income taxes, experienced the largest net migration in 2018 with over 100,000 individuals moving.
ECONOMIST CORNER
In addition to voting in state-wide elections, individuals can also vote with their feet by moving to a state that treats income more favorably. The data has born this out, with high tax states seeing large migration flows out while low-tax states see large migration flows in. This is partially in response to the 2017 Tax Reform, which prevented taxpayers from deducting state income taxes from their federal returns.