Impact of State Income Taxes on American Migration

SOURCE studyfinds.org
Researchers from UC Riverside found that Americans have been moving to states with lower income taxes to keep more of their wealth since the introduction of state income taxes. Raising income taxes often leads to out-migration of wealthier individuals, impacting state revenue.

Key Points

  • Historical analysis from 1900 to 2010 shows a correlation between state income taxes and out-migration of wealthier Americans
  • States implementing income taxes with the goal of redistributing wealth often face challenges in retaining wealthy residents
  • Americans' mobility and ability to move to states with lower income taxes contribute to this phenomenon

Pros

  • Increased understanding of the impact of state income taxes on American migration patterns
  • Highlighting the unintended consequences of raising income taxes

Cons

  • Potential negative impact on state revenue due to out-migration of wealthy individuals