August 22, 2013
Blue states like California and Illinois are struggling meeting obligations for their own public pension funds, so they certainly don’t need this latest bit of news—their tax bases are shrinking drastically. A new study on state-by-state income migration from the Tax Foundation (h/t WSJ), found that New York, California, and Illinois—the largest blue states in the country—led the country in income flight during the last decade. New York was hit particularly hard, losing $46 billion dollars of taxable income to people leaving the state over the past ten years. And these states were not alone: blue stalwarts like Maryland, New Jersey, and Massachusetts were not far behind.
Red and purple destinations like Florida, Texas, Arizona and North Carolina led the pack of states benefiting from this migration, each gaining over $10 billion in taxable income due to new migrants from other states. Although the red/blue divide breaks down somewhat towards the middle of the group—red states like Louisiana saw some minor losses while blue states like Vermont enjoyed modest gains—the overall pattern is hard to miss.
One of the trends driving blue boosters to despair is that the most extensive government programs require taxes hikes which tend to cause businesses to flee, eventually taking residents and their tax dollars with them. This erosion of the tax base forces states to hike taxes further to keep the system running which only accelerates the process.
Then there are the businesses — like gunmakers — who have left in the face of cultural/legal pogroms. Either way, bring your jobs to Tennessee!