Katherine Loughead wrote last week for the Tax Foundation that the migration from high-tax to low-tax states is continuing, according to U.S. Census Bureau interstate migration data as well as data released last week by U-Haul and United Van Lines.
"For the second year in a row, South Carolina saw the greatest population growth attributable to net inbound domestic migration (1.26%)," the Tax Foundation data showed. The Palmetto State was followed by Idaho (0.83%), Delaware (0.79%), and North Carolina (0.76%).
It used to be that people's most significant reason for moving was the climate. The "Sun Belt" migration in the post-World War II era changed the face of American politics and culture. Climate is still a big attraction, especially for an aging population. But as companies relocated to red states, workers naturally followed.
"Americans are continuing to leave high-tax, high-cost-of-living states in favor of lower-tax, lower-cost alternatives. Of the 26 states whose overall state and local tax burdens per capita were below the national average in 2022 (the most recent year of data available), 18 experienced net inbound interstate migration in FY 2024," Loughead wrote.
"Meanwhile, of the 25 states and DC with tax burdens per capita at or above the national average, 17 of those jurisdictions experienced net outbound domestic migration," she added.
According to census data, Hawaii lost the biggest share of its population to other states; it's ranked at 48 for the third-highest tax burden in the country. The rest of the top 10 states for population outflow were New York (50), California (46), Alaska (1), Illinois (44), Massachusetts (37), Louisiana (12), New Jersey (45), Maryland (35), and Mississippi (21).
Numbers released this month by U-Haul and United Van Lines showed migration patterns closely, but not precisely, tracking the Census Bureau's information. Loughead attributes the disparities, at least in part, to the companies' varying geographic coverage and market share.
There's an interesting contrast between Alaska, a state ranked #1 in low taxes and 47th in a net outflow of population, and Hawaii, which is ranked 50th. Alaska's climate is challenging with limited opportunities even with its low taxes. Hawaii lost the most significant share of its population among the states.
Obviously, climate isn't everything.
"Many individuals cite job opportunities, cost of living, family reasons, or lifestyle reasons for moving from one state to another," notes Loughead. "While taxes are far from the only factor affecting the cost of living or the job opportunities available in a state, they are an important factor, and they are one that is directly within policymakers' control."
Many older people living in northern climes would move South if they had the means and the opportunity. As the U.S. population ages, the trend of people in high-tax states moving to low-tax states will likely continue.
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