There are many factors that determine whether the population of a
specific area in the U.S. will grow or shrink. Obviously, people move between
states in search of better jobs or schools, or for more affordable housing, or
for warmer or drier weather.
But a major reason for the migration taking place within America
is often overlooked. Quite simply, people move toward states with lower
taxes, and away from states with higher taxes.
An analysis by economist Brian Wesbury1 of the Census Bureau’s 2007
population growth data, plotted against the Tax Foundation’s measure of state
tax burdens, yielded the inescapable conclusion that higher taxes are linked to
slower population growth.
A state tax burden is defined as the total of all the state
and local taxes that businesses and individuals pay, as a percentage of their
total income.
As Wesbury notes, taxes make a big impact on the decisions people
make when they are thinking about where to retire. Taxes also affect the
decisions executives make about where to locate a business or expand it.
States with lower taxes allow businesses to keep more of their profits and
allow employees and retirees to keep more of their income.
In 2007, 8 million Americans moved to a different state. That
works out to 20,000 people crossing state lines every day, which is a record
number.
A survey by the moving company United Van Lines, found that
Michigan’s population had fallen the fastest last year, with twice as many
families moving out of state as families moving in. New York, New Jersey,
Ohio, Pennsylvania, and Illinois also saw population declines.
So where are Americans moving to? Among the most popular
destinations are Florida, Nevada, New Hampshire, South Dakota, Tennessee,
Texas, Washington, and Wyoming.
What do these eight states — which are both literally and
figuratively “all over the map” in terms...
