October, 2020, By The Numbers: High Tax States = High Out Migration States, Low Tax States = HIgh In MIgration States

On a periodic basis we do some posts that fall under the theme of “by the numbers.” Rather than trust what the American political tells us about reality, we like to examine the real numbers and the real reality in the world to understand what is actually going on. Relying on politicians, and their cohorts in the media, to tell us what is reality is always a sucker bet. They have their own agendas and goals, usually centering around their needs and self-enrichment. So we need to look at the reality of the numbers to determine what is really going on.

Previous analyses of “by the numbers” can be accessed by entering the phrase in the search box above. This is the third and final post in this series where we look at the numbers to truly find out how good, not likely, or bad, most likely, the American political class is doing in managing our tax dollars, protecting our freedoms, and resolving major issues that affect all of us.

We have often discussed the reality that many big city residents are leaving their Democratic run cities for places that are safer and have a lower tax burden. While liberals and Democrats may deny this reality, the numbers do not lie. Let’s look at a set of numbers to verify this reality.

The numbers in this discussion come from the ALEC which has the following charter: “The American Legislative Exchange Council is America’s largest nonpartisan, voluntary membership organization of state legislators dedicated to the principles of limited government, free markets and federalism. Comprised of nearly one-quarter of the country’s state legislators and stakeholders from across the policy spectrum, ALEC members represent more than 60 million Americans and provide jobs to more than 30 million people in the United States.”

The ALEC does a lot of great analyses and research on what is really going on throughout the country. One set of numbers they track is the migration of state citizens into or out of each state over time. Their tracking horizon is ten years stretching from 2009 through year 2018. Some of their findings include the following info:

• California has lost 811,801 residents in the ten years from 2009 thru 2018, making it the state with the third most exiting residents.
• New York has lost 1,366,465 residents over the past ten years, making it the state with the most exiting residents.
• New Jersey has lost 501,679 residents over the past ten years, making it the state with the fourth most exiting residents.
• Illinois has lost 843,799 residents over the past ten years, making it the state with the second most exiting residents.
• Connecticut has lost 193,944 residents over the past ten years, making it the state with the eighth most exiting residents.

What do these states have in common? They are consistently the five states that we have proven time and time again that have the best chance of being the first state government of going bankrupt. The state political class in each of these states has consistently raised spending which required raised taxes which led to more spending and more taxes. 

Finally, millions of residents in these states have decided that paying more and more in taxes and getting less and less in quality government services is not the way to live. As a result, more and more state residents are leaving the state, resulting in less and less tax revenue without the commiserate reduction in state government spending. This has required the state politicians to raise tax rates and introduce new taxes. This increase in taxation causes more state residents and businesses to leave which reduces the tax revenue stream and the financial death spiral is on.

Consider another set of related ALEC statistics and analyses:

• California has the highest state income tax burden in the country.
• New York has the second highest state income tax burden in the country.
• New Jersey has the third highest state income tax burden in the country.
• Illinois has the 34th highest tax burden in the country (but plans are afoot to raise the state income tax burden in the state).
• Connecticut has the 15th highest tax burden in the country.

See the connection? Raise taxes, which reduces freedom, and eventually people are going to bail out, taking their wealth and tax revenue with them. The numbers do not lie.

But where are these people going? The ALEC analysis has the answer:

• From 2009 to 2018, 1,1139,015 people moved into Florida, the state with the second highest in migration numbers over that time period.
• From 2009 to 2018, 1,262,347 people moved into Texas, the state with the highest in migration numbers.
• From 2009 to 2018, 472,668 people moved into North Carolina, the state with the third highest in migration numbers.
• From 2009 to 2018, 385,647 people moved into Arizona, the state with the fourth highest in migration numbers.

Why these states? Consider the state income tax burden ratings from ALEC: 

• Florida ranks last in state income tax burden since it has no state income tax.
• Texas is tied with Florida for the last spot since it also has no state income tax burden.
• North Carolina is the 21st best state income tax burden
• Arizona is the 13th best state income tax burden.

High taxes, out migration, Low taxes, in migration. It is a simple formula, the numbers do not lie. In fact, another ALEC analysis found that the lower the tax burden in the state, the better the quality of state government services in the state, the exact opposite of what one would intuitively expect. 

One would think that the more you pay in taxes, the bigger and better the government services are. But the exact opposite is true. Seems the more money that politicians have, the more money they waste.

And yet in a recent post we discussed how the governor of New York, Andrew Cuomo, has stated that he will raise taxes on New York state residents. He is going this route despite the fact that:

1. From 2009 to 2018, his state led the nation in people leaving for other locations to live, taking their wealth and tax money with them.
2. The migration out of New York City and New York state has accelerated dramatically since the ALEC analysis was done, given the continued raising of state and city taxes and the crime and covid fallout that the state residents and businesses have had to endure.
3. Moving companies working in New York City report that they cannot find enough moving vans fast enough to satisfy the demand of people moving out.

Combine this insanity with the Illinois insanity, where the state legislature is considering increasing the state income tax rates, and the result is obvious: the financial death spiral in these states will now accelerate even faster, resulting in fewer and lower quality government services, higher and higher taxation, and larger and larger out migration. And the state politicians still have no clue despite what the numbers and trends are telling them. Idiots.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

https://www.amazon.com/s?k=loce+my+country%2C+loathe+my+government&ref=nb_sb_noss

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w