(AmericanProsperity.com) – Americans are moving from high-tax states in the West, Northeast, and Midwest by the millions and that’s causing serious financial problems for those states. Over the last ten years, the US Census Bureau estimates say that millions of Americans have moved to lower-taxed states.
California may lose a congressional seat for the first time in its history as approximately 230,000 people left the state in 2018 and 2019 alone. Many Californians are reportedly moving to Texas, Arizona, and Colorado.
New York saw the biggest decline in the overall population followed by New Jersey, Massachusetts, and Illinois.
Why?
It’s true that family considerations are the biggest reason people move.
However, don’t families live in liberal high-taxed states?
There must be another reason… and there does appear to be a common correlation.
High Tax Burdens are Pushing People Out
According to the think tank Tax Foundation, tax burdens are the leading cause for people moving. They discovered that a 1% higher tax burden as a percentage of income in 2010 resulted in a state’s population reduction of 1.4% by 2019.
That results in billions of dollars in lost tax revenues for each high-tax state that saw population losses to low-tax states.
Research by Illinois Policy, a state-level think tank, concluded that 4 of the 5 slowest growing states over the last 10 years also had a progressive income tax. According to their research, 3.2 million people left states with progressive income taxes for states that have none.
Why Is it a Problem That People Are Leaving High-Tax States?
When a state’s population declines, especially among working-age people, tax revenues across the board decline. Tax revenues are needed to pay for general liabilities, pensions, and infrastructure, among other expenses.
Many of these costs are fixed regardless of the size of the population that pays taxes. As costs rise and income drops, those left behind have to foot the bill.
A state has the same choices a business has: reduce expenses or increase income.
However, it doesn’t seem that liberal politicians are getting the message. Their answer isn’t to get spending under control; it’s to double down and increase taxes even more.
If a business increases prices and is not competitive, then it will lose customers and ultimately go out of business.
Is it a surprise that people are tired of paying high taxes and are taking their money elsewhere?
Another problem is politicians constantly claim they’re going after the rich. However, the facts don’t bear that out. It’s middle-class families that pay the most and therefore lose some or much of their discretionary income.
Americans are demonstrating they will move where they can afford to live. That’s in low-taxed, smaller government states that also have a lower cost of living. It’s also in these lower-taxed areas where businesses are starting and most of the jobs are being created.
~Here’s to Your Prosperity!
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