High Taxes Mean Less Revenue For Some States

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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

Migration-AGI-(large)

“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.

Sam Rolley

Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After covering community news and politics, Rolley took a position at Personal Liberty Media Group where could better hone his focus on his true passions: national politics and liberty issues. In his daily columns and reports, Rolley works to help readers understand which lies are perpetuated by the mainstream media and to stay on top of issues ignored by more conventional media outlets.

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  • Gib74

    I guess 0bama will somehow find this to be ‘racist’…

    • NObama_Holder_Reid_Pelosi_2012

      You know better, It is “unpatriotic” to not want to pay high tax rates. A real Patriot would be willing to pay 60 – 80% of their income in the eyes of Obama and his socialist administration. Of course they would be exempt.

  • Blank Reg

    In the process of moving to WA state myself. I like the idea of no State income tax. Between that and no sales tax in OR I can save a lot. Of course, the REAL smart money is going completely offshore (like, Chile). But hey, one step at a time.

  • Chester

    Using that reasoning, for a state to have far more money than it needs, it should pay people and companies to be there, no taxes of any sort. Of course, with no income, there will be no state support for schools, road building, or anything else the state does to support its citizens now, but seems like a LOT of people believe private funds can take care of all that without costing them a cent more.

    • Michael Shreve

      Some states DO NOT tax income. Strangely, the alternative, sales taxes, are generally NOT significantly higher than in states that DO tax income. It is the BUDGETS that are lower.

      • ChuckS123

        People see sales tax every time they buy something, but may not be real aware of income taxes withheld from their paychecks.

    • Bill

      Chester,
      There is efficient government and there is wasteful government. If you would cut out the waste in government, you could cut the budget by 50%.
      Hong Kong made their public sector more efficient and they refunded $6,000 to every citizen.
      So, instead of feeding the wasteful beast, it needs to be put on a diet

      • Joe

        in the US you would likely cut 75% if you cut all the waste

  • Mikey V

    The big losers are all the Statist gun-grabber democrat-marxist sh*# holes. How unsurprising.

  • Michael Shreve

    It’s called voting with your feet.

  • Bill

    Everyone knows that lower taxes bring a higher revenue because the economy grows. It has been proven over and over again..
    Or do they not know that fact because the government is using the “higher taxes” excuse to hide their incompetence.

    • Clint McInnes

      If “everyone” knew that, we wouldn’t be have the morass in which we are currently drowning. The voters don’t know that because the media won’t report it. The slimewads in D.C. don’t care, even if they do understand, because all they want to do is consolidate power. The government does NOT care about the populace, and I truly wish more of us ‘got’ that. There are very, very few real statesmen left, only voices crying in the wilderness.

      • Bill

        Hi Clint,
        There is a book out called “The Town”. It is about Washington DC. The author says that there are no more democrats or republicans in Washington, only millionaires

        • Clint McInnes

          How sadly, sadly true. (Also poverty. D.C. has LOTS of poverty juxtaposed with the Elites.)

  • ChuckS123

    In addition, people who stay in high-tax states are probably less likely to start or expand businesses, therefore making fewer good jobs. So there’s loss of business taxes and personal taxes. The opposite in low tax states, of course.

    People talk about businesses moving out of a state. I think that also businesses that expand may do so in or out of a particular state. If a business has to cut back, they may cut back in or out of a particular state. If someone starts a business he may start it outside his state without moving if he lives close.to a border. People living near Chicago could start businesses in Indiana.

  • Minnie

    This article is about personal income tax, not business income tax. There maybe a difference as I know NY has generous retail business tax breaks in clothing, and manufacturing. NYC also has a great film tax rebate incentive that has been going on for years.

    This article is skewed and people commenting take this on as wholesale taxation. Although their statistics maybe correct, these states have a huge proportion of residents compared to many red states.

    Yes TX does do great business, and has great business policies that add to the migration of people moving there along with more revenue. But last I checked FL. has a decent bill on health care.

    There are many things to look at in terms of migration and state revenue/taxes, not just personal income taxation.

    • Clint McInnes

      Your overall points are well-considered. However, the THRUST of the article is that PEOPLE are leaving some states and moving to others and that statistically they move from states with confiscatory personal tax rates to states with lower (or no) personal income and property taxes. Individuals do not typically take corporate tax rates into account unless they own a piece of a corporation. I know I don’t.