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Flee or Work?

May 30, 2012

Kevin Williamson nicely does it again with his viewpoint on recent studies about movement from high-tax states to low-tax states.

I am agnostic about the role of taxation, inasmuch as there isn’t much in the data to indicate how big a role relative tax rates played. It is true that low-state states account for a great deal of the out-migration from high-tax states, but the reverse also is true: Texas has seen more of its citizens move to high-tax California than to any other state, while Florida has seen more emigration to high-tax New York than to any other state except neighboring Georgia. Arizona has seen many more residents relocate to high-tax California than to low-tax Texas. Massachusetts sends more people to Florida than to any other state, with New Hampshire running a close second, but the next most popular destinations are hardly tax havens: New York, California, Connecticut, and Rhode Island.

I’ve moved several times in my career, and I’ll admit that my career has been relatively high-paying at pretty much every point in comparison to my peer group.  So while I agree that it seems logical for people to make a move based on tax rates, I’ve never seen it in most of my personal experiences.  I can definitively name one guy, who chose to move to another state from Oregon prior to retiring mostly to get a better tax position, but that’s all that immediately comes to mind.

So while we’ve featured several posts here on the subject, I’ve always wondered more who builds that kind of calculus into daily living.  If I look at my four major moves they’ve been for: a job, a job, the love of my life (and a job), and to get out of California.  Even in that last case, I really don’t recall taxes being a major discussion point between the two of us as we threw everything in the car and bolted.

Now, let me be truthful.  The state of the California economy would probably make me think about moving back there, but that hasn’t stopped several really smart people that I know from taking that option.  If anything, other California restrictions would stop me from moving well before tax burdens.  So that great job in the Bay, all you recruiters ringing the phone that I don’t answer?  Well, no thanks.

So do I really think that taxes play heavily in the decisions people make?  Well, thoughtful people will probably chock one up in the “negative” column when considering a move to CA, but I can’t see how it stops most people from making the change.

Back to Lynn, who probalby has better data.  That’s the difference between strategy by feeling and strategy by thinking…

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