Certain states have lost a significant portion of their tax base (and population) in recent years due to rising taxes, according to www.HowMoneyWalks.com, a national website created in conjunction with the book “How Money Walks,” which focuses on how people and money move between states.
The book’s author, Travis H. Brown, tracks the millions of people in the United States moving from state to state, transferring $2 trillion in adjusted gross income (AGI) from 1995 to 2010. Brown says Americans are fleeing high-tax states and moving to low-tax states. He claims money walks to where it’s most welcome.
A fascinating interactive map showing the amount of money flowing from state to state — called How Money Walks — shows that nearly $10 billion in wealth moved from California to Nevada in the last 15 years. Nine states don’t tax personal income. That includes Nevada, which has no income tax. Florida, another state that does not tax income, has gained $95 billion that’s moved there over the last 15 years. Florida also lacks an estate tax.
States that have increased their personal income tax rates like California have seen a massive exodus of money — and people. California’s tax rate is 13.3 percent for personal income, one of the highest in the nation, plus the federal tax rate.
Brown, a political consultant and legislative lobbyist and co-founder of St. Louis-based Pelopidas LLC, used Census Bureau data and IRS data to create the maps. It shows trends in movement of wealth and population, which he measured by adjusted gross income figures between 1995 and 2010.
The big losers: New York, California, Illinois, New Jersey and Ohio. New York leads the pack, with $68 billion leaving the state in the last 15 years.California was second, losing $45 billion in adjusted gross income migrating to other states. These states are imposing punishingly high taxes on their citizens — and hundreds of thousands of Americans are leaving these high tax states.
The winners: Florida, Texas, Arizona, Nevada, New Hampshire, Wyoming, South Dakota, Tennessee and Washington. At $95 billion, Florida is the number one state where money is headed. Texas is second; it gained $25 billion in 15 years. Nine states have a situation like Texas and Florida where collectively they have gained $146 billion, Brown’s research shows. Whereas the reverse — the nine states with the highest personal income tax — have lost over $120 billion in adjusted gross income, Brown claims.
Currently, several states — including Oklahoma, Louisiana, Kansas and Nebraska — have proposals to eliminate or sharply cut their state income taxes. They want the inflow that Texas and Florida are enjoying.
“If you are losing your working wealth to other states, you are losing your most precious cargo,” writes Brown in the introduction of How Money Walks “These are your earners, your workers, your entrepreneurs; this is your tax base. This great movement of working wealth into and out of states is staggering and has serious economic ramifications. I think it is imperative for all Americans — you, me, politicians, planners, economists, soccer moms, hockey dads, everyone — to pay attention to it and, possibly, figure out why some states and cities are growing, prospering, and attracting people and incomes while others aren’t.”
Here’s the interactive map. Click a state to get the figures.