The Undeniable Influence of State Governments on Population Growth

The question of whether taxes influence peoples' decisions to move from state to state is an old one, and the answers frequently break along partisan lines. The right has long believed taxes do affect migration. The left? It doesn't matter at all.

But the Tax Foundation looked at data from moving companies and found there is some good evidence that tax rates play some role in where people live:

The U.S. population grew 0.4 percent between July 2021 and July 2022, an increase from the previous year's historically low rate of 0.1 percent. While international migration helped numbers on the national level, interstate migration was still a key driver of state population numbers. New York's population shrunk by 0.9 percent between July 2021 and July 2022, Illinois lost 0.8 percent of its population, and Louisiana (also 0.8 percent), West Virginia (0.6 percent), and Hawaii (0.5 percent) rounded out the top five jurisdictions for population loss. At the same time, Florida gained 1.9 percent, while Idaho, South Carolina, Texas, South Dakota, Montana, Delaware, Arizona, North Carolina, Utah, Tennessee, Georgia, and Nevada all saw population gains of 1 percent or more.

This population shift paints a clear picture: people left high-tax, high-cost states for lower-tax, lower-cost alternatives.

The Tax Foundation notes the pandemic “accelerated changes to the way we live and work, making it far easier for people to move—and they have.” Whether those changes are permanent is unknown. But (some) state governments are keenly aware that they must make changes to their tax codes, regulations, education systems and more if they are to remain attractive destinations for individuals, families, companies and so on.

That means states will “compete” for residents. And competition, especially among governments, is long overdue. But a word or two of caution: people move for a wide variety of reasons. Taxation leads the list for some. But for others? It's quality of life – a nicer climate, for instance, or to be closer to family and friends.

Governments have no control over those things. But at the margins, on issues like taxes, or education or old-fashioned opportunity…there, governments have a role to play.

And the best way to play that role? Staying out of the way, in the wallets and bedrooms, of residents.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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