This week, the Gazette published a “fact check” on a line from one of my first newsletters of the year, “Data has long shown the states with low or no income tax grow more quickly than states with high, punitive tax rates.” While I’m sure most of you missed this alleged “fact check” from the Gazette, I thought you may be interested in some of the data referenced and what information I gave to them.
First, I sent information from the National Conference of State Legislatures (NCSL). As I told the Gazette, the possibly simplest fact supporting my claim is the reapportionment of congressional districts over the last 30 years. Illinois and New York, two states with a heavy tax burden, lost seats in congress every decade. By contrast, Texas and Florida, states without an income tax, added seats every decade. Meanwhile, Utah and Arizona, states comprised of literal deserts, have added seats in congress during those decades. California, perhaps the state with more inherent advantages in climate, natural resources, and amenities than any other location in the world, lost a seat in congress in the 2020 Census.
Second, I provided a piece from the Wall Street Journal. In this article, they write, “Migration from high- to low-tax states—especially those in the Sun Belt—has been going on for well over a decade… Illinois’s population declined by another 141,039 between spring 2020 and this past summer as 151,512 people on net left the state for other states. California lost 300,387 amid a net out-migration of 429,283 residents. The biggest loser—you already know this—was New York, whose population shrunk 365,336 due to an outflow of 406,257 residents.
On the other hand, Texas added 382,436 new residents, including 211,289 from other states. Florida gained 242,941 in population as 263,958 people from other states flooded in… Same for Arizona whose population grew by 124,814.”
The third fact was a link to The National Review. They highlighted U-Haul’s truck data and it too bodes ill for California and New York. The article says, “California, however, bled outbound citizens so badly, it broke U-Haul’s ability to measure — because the company ran out of trucks to rent: ‘California is 50th and Illinois 49th on the list for the second consecutive year, indicating those states once again witnessed the largest net losses of one-way U-Haul trucks… California remained the top state for out-migration, but its net loss of U-Haul trucks wasn’t as severe as in 2020. That can be partially attributed to the fact that U-Haul simply ran out of inventory to meet customer demand for outbound equipment.’”
If all of that data wasn’t enough, the Tax Foundation also does an excellent job distilling the information down succinctly into this article, where they say, “Americans were on the move in 2021, and they chose low-tax states over high-tax ones. That’s the finding of recent U.S. Census Bureau population data, along with commercial datasets released this week by U-Haul and United Van Lines.”
Finally, there is the opening paragraph from American Legislative Exchange Council’s annual study, Rich States, Poor States:
“The new edition finds that even through the pandemic, states with policies such as low or no income taxes and worker freedom are more economically competitive and better positioned for wage growth, job creation and domestic in-migration compared to states with higher taxes and government spending. The new rankings also reveal that, as proven by new 2020 Census data, Americans “vote with their feet” by moving from high-tax to low-tax states.”
Comprehensive tax reform is a priority this legislative session. The Senate’s proposal ensures Iowans keep more of the money they earn, simplifies Iowa’s complicated tax code, and makes Iowa more competitive. In my opinion the data clearly support our policy initiatives.