Map comes from Jon Bruner at Forbes
Free Exchange at The Economist:
Lately I’ve been spending lots of time in Austin, Texas. Enough so that I’ve had to start driving again. When you go many years without driving, it becomes terrifying. So to refresh my skills I took lessons with a wonderfully patient and brave woman who has taught driving in Austin for nearly thirty years. I expected to be one of her few adult students, but no. My instructor claimed in the past few years the number of adult students increased exponentially, not quite rivalling the number of teenagers. Most are tech workers who come from all over the world, drawn by the vigorous labour market. Adult driving students struck me as a rather interesting economic indicator.
It doesn’t tell us anything we didn’t already know. Migration statistics reveal that people are moving in droves to Texas. Why? Jobs and no state income taxes. High earning New Yorkers and Californians can take home between 9% and 11% more of their income by moving to Texas. Every trip down I speak to at least one bitter New Yorker/Californian fed up with high taxes and cost of living.
Brad DeLong responds:
At Free Exchange, A.S. punches her internal Economist credentials by telling only half the story:
No, not half the story. Much less than half the story. The Tax Foundation tells us that “Tax Freedom Day” in Texas is April 5–that is, that Texans pay 26.0% of their income in taxes–while “Tax Freedom Day” in California is April 14–that is, that Californians pay 28.5% of their income in taxes. Roughly half of that difference comes from the fact that our federal tax system is somewhat progressive: the amount by which Texas is a low-tax state is not (as a naive reader of A.S. would suppose) 10% of income but rather about 1.3% of income.
And, of course, to at least some extent you get what you pay for.
And then there is the other half of the story: costs of living in New York and (coastal, metropolitan) California are high because there isn’t much space and because they are very nice places to be:
I suspect A.S. is being somewhat misled by this fascinating interactive tool which charts domestic migration only and thus gives the impression that certain places are experiencing massive net population flight when in fact they’re just attracting a lot of immigrants.
What’s more, though Texas certainly has lower-than-average taxes, it’s hardly the lowest tax state in the union. According to the tax foundation that prize is owned by Alaska (which is an unusual case) followed by Louisiana, Mississippi, South Dakota, West Virginia, New Mexico, Tennessee, Nevada, Alabama, and Kentucky which I don’t think is anyone’s top ten list of economic and civic dynamism. Conversely, the most-taxed states, Connecticut and New Jersey, are also the most prosperous.
The issue tax-wise, especially when it comes to state government that’s not involved in so much pure transfers, is value rather than levels. Paying relatively high taxes in exchange for excellent services is going to be fine for your state. Having subpar services paired with low taxes is also workable. The problem arises if your high taxes don’t actually deliver good schools or nice parks or functioning transportation.
James Joyner looks at a different map:
Below is the graphic for Los Angeles County:
Two things strike me as interesting here. First, the outward migration appears to be vastly outweighing the inward migration. Second, the outward flow is much more scattered than the inward flow. Both of those surprise me, given the incredible attractiveness of Southern California.
It appears that, in 2008 at least, most of the people moving to LA were doing so from the Boston-New York-Washington corridor whereas most leaving LA were staying either on the West Coast or somewhere else in the Sun Belt. I would have guessed that LA would be getting a much larger chunk of people from the Upper Midwest. Maybe the graphic is just overwhelmed by population clusters.
Barry Ritholtz at The Big Picture:
Forbes doesn’t go into the qualitative factors, but one would imagine it includes things like employment opportunities, social options, housing costs, taxes, etc.
Manhattan: Young people move in, older marrieds move out
click thru for Detroit, LA and Seattle
Detroit: (Everyone Out of the Pool!)
Seattle: So that’s Where everyone else went!
Los Angeles: Last person out of Cali please turn off the lights!
And for those of you who blame high California taxes for their exodus, how do you explain Miami ?
UPDATE: Kevin Drum