America’s top five inbound vs. outbound states: How do they compare on a variety of economic, business climate and tax burden measures? Part II
AEIdeas
In a CD post last month, I looked at America’s top five inbound and top five outbound states last year, based on household moving data from North American Moving Services US Migration Report for 2017. Specifically, I compared the top five inbound and top five outbound states on a variety of measures of economic performance, business climate, business and individual taxes, fiscal health, and labor market dynamism, and those comparisons are displayed graphically in the table above.
Yesterday USAToday published a nice summary of The Tax Foundation‘s report “Facts & Figures 2017: How Does Your State Compare?” that analyzes the total tax burden in each state, measured as the percentage of a state’s income that goes to taxes for state and local governments (income taxes, property taxes and sales taxes). I’ve added that measure of total tax burden in the table above (in bold) as the new first row in each group above (Top 5 Inbound and Top 5 Outbound states), along with the state ranking for total tax burden.
For example, four of the top five outbound states (Illinois ranked No. 46, Connecticut at No. 49, New Jersey at No. 48, and California at No. 47) were among the five US states with the highest tax burden — New York was No. 50 (highest tax burden). The average tax burden of the top five outbound states was 11.2%, with an average rank of 43.2 out of 50. In contrast, the top five inbound states have an average tax burden of 8.7% and an average rank of 16.6 out of 50. As would be expected, Americans are leaving states with some of the country’s highest overall tax burdens (IL, CT, CA and NJ) and moving to states with lower tax burdens (TN, SC and AZ).
Bottom Line: As I concluded in the original post, now supplemented with another measure of total tax burden by state, the migration patterns of US households last year followed predictable patterns based on differences among states for tax burden, economic growth, vitality and dynamism, labor market robustness, fiscal health, and party control of state legislatures. The comparison above shows that there are significant differences between the top five inbound and top five outbound US states when they are compared on a variety of measures of economic performance, business climate, tax burdens for businesses and individuals, fiscal health, and labor market dynamism. There is empirical evidence that Americans do “vote with their feet” when they relocate from one state to another, and the evidence suggests that Americans are moving from states that are relatively more economically stagnant, Democratic-controlled fiscally unhealthy states with higher tax burdens, more regulations and with fewer economic and job opportunities to Republican-controlled, fiscally sound states that are relatively more economically vibrant, dynamic and business-friendly, with lower tax and regulatory burdens and more economic and job opportunities.
It’s no surprise that the five outbound states you listed have average residential electricity rates among the highest in the country (an average of 16.7 cents) while the five inbound states rank lowest (an average of 11.4 cents).
So what is with Michigan. It has a moderate tax rate, fairly strong growth – better than most of the ingress states, and yet they are top five in folks leaving. Is it the weather? I guess the employment growth could stand to improve, but with a fast growing GDP, one would expect employment to go up as well.
Republicans that don’t follow through (as is typical of most Republicans when they have power), that let the progressive minorities (e.g., in Detroit, Ann Arbor and East Lansing) set the tone of the conversation, and an executive that has basically shown himself to be incompetent. In other words, the same problems you’ll find with Republicans in Washington.
Never found anybody leaving a business friendly high tax state to be unhappy. Proof is in the math. Never has a Democratically controlled state with tough Union laws and high taxes had people say I love my cost of living!
How many decades have you been knocking California?
And what happened to North Dakota?
https://www.bls.gov/regions/midwest/north_dakota.htm#eag.
“And what happened to North Dakota?”
Winter set in and it got so cold that it was difficult to work outside? Check back during the summer.
“Winter set in and it got so cold that it was difficult to work outside”
Exactly. Here’s today’s weather report.
https://www.youtube.com/watch?v=GAq1Ml3PlGc
How many decades have you been knocking California?
Data = knocking California.
Data —
https://fred.stlouisfed.org/graph/?g=iE5j
More Data —
While CA has lost a lot of mfg jobs over the decades — I think they are around 1/3 what they used to be in 1990 —
they still have over 35k mfrs; over twice what TX has, and most mfr states are around 5k to a little over 10k.
And this is supposed to be a state that makes it tough to operate in with all their regs and govt interference.
You’re looking at entreprenurialism and libertarian spirit in action and don’t even recognize it because of your ideological blinders and myopia.
Once again (as I did back in January), I ask Dr. Perry why he continues to use data from a single moving company when much more comprehensive and reliable data are available from the Census Bureau. Unless he decides to redo his analysis with proper data — data that would make it through peer review (which the moving company data won’t) — I can only assume that he doesn’t want to redo his analysis because the conclusions would be different. According to Census Bureau data, the top out migration states are Wyoming, Alaska, New York, Hawaii, Illinois, North Dakota, New Jersey, and Connecticut. California and Michigan are considerably lower down on the list. The leading inbound states are Idaho, Nevada, South Carolina, Oregon, and Arizona.
Once again, I challenge Dr. Perry to redo his analysis using Census data and publish his results here.
Greenblue: Thank you very much for the challenge. I have just analyzed the Census Bureau data for state-to-state migration flows in 2016 (most recent data available), and have compared the top ten US states for domestic net outmigration and the top ten US states for domestic net inmigration in 2016. On a variety of measures of tax burden, business climate, economic performance, etc. the results are very similar to my previous analysis for the top 5 inbound and top 5 outbounds state for 2017, based on the North American Van Lines annual migration study.
I’ll publish my results shortly on the blog, as you challenged me to do.
Great! I’ll be really interested in the findings.
https://www.unitedvanlines.com/contact-united/news/movers-study-2017
Click on state — compare CA and TX — reason for move; Age, and Income.