...State and local tax burdens at the beginning of the decade, as measured by Washington, DC-based think tank Tax Foundation, had a strong negative relationship with population changes by the end of it. For every 1 percent higher the tax burden as a percentage of income in 2010, a state’s population was 1.4 percent smaller in 2019. In larger states, the 23 with populations higher than five million and more diversified economies, the correlation was a negative 2.4 percent.
At the extremes, high-tax states failed even more clearly than low-tax ones succeeded. Four of the six highest-tax states in 2010 were among the nine with population growth below 1 percent for the decade (the whole nation grew by 6 percent). Eight of the nine states with the lowest population growth were among the 17 highest-tax states. Meanwhile, none of the 10 states with population growth over 11 percent were among the 20 highest-tax states early in the decade and four were among the seven with no personal income or investment taxes. The population of low-tax Texas increased by more than the entire population of high-tax Connecticut.
State and local officials should learn from the past. But, unfortunately, new governors and state legislatures in high-tax states like Connecticut have doubled down on past policies by keeping taxes and spending high or raising them even further. And things are getting worse in the highest-taxed state in the country, New York, which has lost more than 200,000 people since just 2015. No one should be surprised...
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