News - Bill's Blog

Lab rats fleeing the cages

January 4, 2016

United Van Lines released its annual migration study this morning.  In 2015, outbound moves remained high in states with the highest Taxpayer Burdens, as calculated by Truth in Accounting.  And states with high inbound migration continued to be states in relatively good financial shape.

The chart below shows the average outbound shipment share of total interstate shipments for United Van Lines (UVL) for two groups of states – the 10 states with the highest TIA Taxpayer Burden, and the 10 states with the lowest Taxpayer Burden (out of the 48 continental United States).  Outmigration has been high, if not intensifying, in states with high Taxpayer Burdens.

The four states with the highest share of outbound moves in UVL interstate moves in 2015 were (in order) New Jersey, New York, Illinois, and Connecticut.  Truth in Accounting’s average Taxpayer Burden for these four states rounds out to $42,000, compared to $5,000 for the other 44 continental United States, on average.

Calling states “laboratories of democracy” dates at least as far back as a Supreme Court case decided amidst the developing Great Depression, in a dissenting (losing) opinion by Louis Brandeis.  In recent years, it looks like some of those labs are losing control of the subjects of their experiments.

This helps illustrate some of the challenges facing financially troubled states (and cities).  Having relied on debt and growing off-balance sheet obligations for so long, the option of raising taxes to make up for past shortfalls faces a cold reality.  Higher tax rates may not raise tax revenue, if people are moving away.

We will be digging deeper into the United Van Lines results.

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