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POLICY INSIGHT
BEYOND THE NUMBERS

Sun Trumps Taxes as a Reason for Americans to Move From State to State

Jobs, family, housing, and climate all top taxes as reasons why Americans move from state to state, as we explain in our new paper.  We’re taking a closer look today at how climate affects people’s interstate moves. The IRS tracks Americans’ interstate moves.  Its data show that people are moving from the cold Snowbelt to the warm Sunbelt regardless of overall tax levels or the presence of an income tax in any of these states. The data reveal several trends:
  1. Lots of people moved from the cold-weather states of Illinois, Michigan, New Jersey, New York, Ohio, and Pennsylvania to nearly all of the Sunbelt states between 1993 and 2011.  This trend has held regardless of whether the Sunbelt states impose income taxes.  No-income-tax Florida has been the top Sunbelt destination for households leaving all six states.  But the second choice for all of them has been Arizona or North Carolina — both of which levy income taxes — not the other Sunbelt non-income tax states of Nevada, Tennessee, and Texas.
  2. The amount of out-migration from Snowbelt states isn’t closely related to their income tax rates.  For example, slightly more households moved from Pennsylvania to Florida than from Ohio to Florida even though Pennsylvania’s top income tax rate was only one-third as high as Ohio’s.  Similar numbers of people moved from Illinois, Massachusetts, and Michigan to Florida despite widely varying income tax rates.
  3. More people have left virtually all of the Great Plains states than have moved in.  Among this group of states, only Missouri and Oklahoma have experienced net in-migration; more households left Kansas, Iowa, Minnesota, Nebraska, North Dakota, and South Dakota than arrived.  This pattern has occurred despite a fairly wide range of both income tax and overall tax levels, including the absence of a personal income tax in South Dakota.
  4. Many Frostbelt-to-Sunbelt migrants are retirees.  Forty-five percent of the people who moved from New York to Florida over the past five years were 55 or older, and the shares were as high or higher for those moving to Florida from Illinois, Massachusetts, Michigan, and New Jersey.  Florida’s lack of an income tax may appeal to affluent people from Northern states, but the overwhelming evidence shows that those states would have lost all or nearly all of those retirees for climate reasons alone and that trying to retain them by cutting income taxes would have been futile.