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Low Tax states grow... Well duh!

By
Real Estate Broker/Owner with Miller Homes Group

The biggest contrast between the two states shows up in "net internal migration," the demographer's term for the difference between the number of Americans who move into a state from another and the number who move out of it to another. Between April 1, 2000, and June 30, 2007, an average of 3,247 more Americans moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas saw a net gain, in an average week, of 1,544 people. Aside from Louisiana and Mississippi, which lost population to other states because of Hurricane Katrina, California is the only Sunbelt state that had negative net internal migration after 2000. All the other states that lost population to internal migration were Rust Belt basket cases, including New York, Illinois, New Jersey, Michigan, and Ohio.

This outmigration has to do with taxes. Besides Mississippi, every one of the 17 states with the lowest state and local tax levels had positive net internal migration from 2000 to 2007. Except for Wyoming, Maine, and Delaware, every one of the 17 highest-tax states had negative net internal migration over the same period. Conservative researchers' technical explanation for this phenomenon is: "Well, duh." Or, as Arthur Laffer and Stephen Moore wrote in the Wall Street Journal earlier this year: "People, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states."

American Legislative Exchange Council, Laffer and Moore pointed out that between 1998 and 2007, the states without an individual income tax "created 89 percent more jobs and had 32 percent faster personal income growth" than the states with the highest individual income-tax rates. California's tax and regulatory policies, the report predicts, "will continue to sap its economic vitality," while Texas's "pro-growth" policies will help it "maintain its superior economic performance well into the future." The clear implication is that California should become more like Texas.

Posted by

Terry Miller

Miller Homes Group

Tyler Apartment Locator

Comments(11)

Bill Nazur
First Lending Solutions - Riverside, CA

Terry

ABSOLUTELY 100% CORRECT.

If I didn't have family and everything else centered in California, I'd be out of here probably out to Austin or some other part of Texas. What saddens and pisses me off at the same time, is that as California often goes, the nation follows. There is nothing good in our future based on that model.

Nov 08, 2009 06:18 AM
Paul S. Henderson, REALTORĀ®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

Terry, You are so right. The money goes where the government doesn't waste it! No IOUs for tax returns in Texas...

Nov 08, 2009 06:30 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Terry - Are you just trying to confuse us with facts?  You could feed this info intravenously to politicians and they still wouldn't get it.

Nov 08, 2009 07:15 AM
Mike Saunders
Retired - Athens, GA

Terry - logic and reason, too often, have nothing to do with economic and taxation policy in a "progressive" state. It's all about "fairness".

Nov 08, 2009 07:39 AM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

WOW! Who would have guessed!  Maybe this could work in other places as well.

Nov 08, 2009 02:02 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

That couldn't be...  You mean that people and businesses prefer to actually keep a little more of what they earn?  That isn't what Joe told me.  He said it was my patriotic duty to give him my money.

Nov 08, 2009 02:19 PM
Hugh Krone
Weichert Referral Associates - Hamburg, NJ
Realtor, Sussex County NJ

Wow and I thought people were leaving california because they couldn't stand Pelosi any longer

Nov 09, 2009 12:19 AM
Not a real person
San Diego, CA

We're only too happy to send our disgruntled people to other states. Leaves more of the natural beauty for us. LOL

Actually, taxes are only part of the story. Legislation passed by the Republicans in the 1990s, and some additonal legislation that the Governator pushed through in 2004, make this a very business-unfriendly state. My salary when I moved here in 1993 was four times what it was in Texas; one of the many reasons I moved.

And I remember those property taxes from Texas. All things considered, each time I do an analysis (around tax time), it's a wash, which means I continue to stay in California. Now once I am no longer mentally or physically able to work, the lack of an income but taxes on my retirement fund will probably force me to move to a no-state-income-tax state.

Ideally, I'd like to live in Vancouver, Washington, because the state of Washington has no state income tax and it's on the West Coast, where I would prefer to stay due to my sexual orientation and the fact that I'm in a committed relationship/Domestic Partnership/Gay Marriage, something that I don't see coming about in my Native Texas until the U.S. Supreme Court gets involved like they had to do with inter-racial marriage.

The other nice thing about living in Vancouver, Washington, is that it is right across the river from Portland, Oregon, which has no sales tax, so one could shop in Portland and live in Washington. What could be better!

Nov 09, 2009 11:17 AM
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics

Haha- Thats why I love Delaware!  $200,000 home taxes @ $1,400 a year!  Anyone want to move give me a call I know a great Realtor!

Nov 09, 2009 01:39 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Vegas baby...  Isn't that one of the big escape markets for disgruntled Californians?

Nov 09, 2009 02:01 PM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Terry, one of the reasons that folks are moving to Oklahoma from other states is our low ad valorem taxes in combination with usually lower prices on homes.  Our unemployment is rising though so it seems to be more retirees that are able to take advantage of this.

Nov 09, 2009 11:14 PM