After a long delay, the IRS has finally released data regarding the fiscal impact on the 50 states resulting from the migration of taxpayers in 2010. Comparable data for 2011 are expected to be published soon.
Drawing upon an analysis of the newly issued IRS taxpayer migration data by Jim Pettit, a Human Events contributor, the Washington Examiner’s Michael Barone concluded in a blog post last night that data for the Tax Filing Year 2011 (which reflect interstate and international moves taxpayers and their dependents made in 2010) show that, as in the past, “there is a large migration away from high-tax states to low-tax states.” (See the link below.)
This is correct, but, as Barone himself undoubtedly knows, state-and-local tax burdens are strongly correlated with Right to Work status. That is, taxes in Right to Work states consume a substantially smaller share of residents’ income than they do in forced-unionism states. A major part of the reason why is Big Labor is by far the largest and most effective lobby for higher taxes on all kinds of citizens, and in states where union officials wield the power to force employees to pay union dues or fees as a job condition, the union hierarchy is much more likely to get its way than elsewhere.
A quick look at Pettit’s findings reveals that forced unionism is even more strongly correlated with net out-migration of taxpayers than are high income taxes. In fact, none of the seven states (New York, New Jersey, Illinois, Rhode Island, Alaska, Ohio and Michigan) enduring the greatest percentage losses in adjusted gross income (AGI) due to taxpayer out-migration in 2010 had a Right to Work law at the time, though the Wolverine State went on to adopt a Right to Work law in late 2012. Meanwhile, all seven of the states reaping the greatest percentage gains in AGI due to net in-migration of taxpayers (Florida, South Carolina, Arizona, Idaho, Wyoming, South Dakota and Nevada) have Right to Work laws on the books.
In the aggregate, forced-unionism states lost $11.5 billion in AGI in 2010 due to net taxpayer out-migration. This figure includes both national and international moves, but given that Right to Work states as a group reaped a $10.5 billion AGI gain due to net domestic and international taxpayer in-migration in 2010, it is safe to say that the overwhelming majority of the forced-unionism states’ AGI losses were due to domestic out-migration.
In a future blog post, the Institute will review other related data in the recent IRS release on out-migration concerning the net numbers of taxpayers and dependents fleeing forced-unionism states and the relative average annual income levels of taxpayers who are moving out of forced-unionism states vs. of those who are moving in.