Higher income taxes mean more money for a State, right? Well, not exactly.
According to the Tax Foundation’s State Migration Calculator, the nine U.S. States with the highest income tax rates lost a combined $90.05 billion in adjusted gross income between 2000 and 2010.
The high tax rates could be encouraging migration, leading to revenue loss.
From the Tax Foundation:
“When a person moves to a new state, their income is added to the total of all other incomes in that state. This positively affects the total taxable income in his or her new state, and negatively affects the income in the state he or she left,” the Tax Foundation said.
The five biggest losers of income due to interstate migration were: New York, California, Illinois, New Jersey and Ohio.
New York lost $41.6 billion in revenues, followed by California’s loss of $29.4 billion and Illinois’ $20 billion in lost revenues.
The nine States with no personal income tax, on the other hand, gained $113.17 billion in adjusted gross income between 2000 and 2010.
Florida increases its revenues by the most, raising $67.3 billion in new income. Arizona, Texas, North Carolina and Nevada finished out the top five.