Blue State Exodus

Which do better, blue states or red states? There is a veritable cottage industry devoted to obscure means of proving the superiority of the liberal tax-and-spend model, but when citizens vote with their feet, the result is clear: Americans are deserting blue states and moving to red states.

Joel Kotkin and Wendell Cox have analyzed IRS data, which now allow us to track taxpayers moving from state to state, with basic income and demographic data:

To measure the states that are most attractive to Americans on the move, we developed an “attraction” ratio that measures the number of domestic in-migrants per 100 out-migrants. A state that has a rating of 100 would be perfectly balanced between those leaving and coming.

Overall, the biggest winner — both in absolute numbers and in our ranking — is Texas. In 2014 the Lone Star State posted a remarkable 156 attraction ratio, gaining 229,000 more migrants than it lost, roughly twice as many as went to No. 3 Florida, which clocked an impressive 126.7 attraction ratio.

Most of the top gainers of domestic migrants are low-tax, low-regulation states, including No. 2 South Carolina, with an attraction ratio of 127.3, as well as No. 5 North Dakota, and No. 7 Nevada.

Which states are the losers? Liberal ones:

High costs go a long way to explain which states are losing the most migrants. At the top, or rather, the bottom of the list is New York State, which had an abysmal 65.4 attraction ratio in 2014 and lost by far the most net migrants, an astounding 126,000 people. Close behind was Illinois, a high tax, high regulation, and low growth disaster area. In 2014 the Land of Lincoln had an abysmal 67.2 attraction ratio, losing a net 82,000 domestic migrants.
And then there is the big enchilada, California. For generations, the Golden State developed a reputation as the ultimate destination of choice for millions of Americans. No longer. Since 2000 the state has lost 1.75 million net domestic migrants, according to Census Bureau estimates. And even amid an economic recovery, the pattern of outmigration continued in 2014, with a loss of 57,900 people and an attraction ratio of 88.5, placing the Golden State 13th from the bottom, well behind longtime people exporters Ohio, Indiana, Kentucky and Louisiana.

A separate question, of course, is which citizens blue states are losing. Here the news gets even worse:

Overall, many of the most affluent states are the ones hemorrhaging high-income earners the most rapidly. As in overall migration, New York sets the standard, with the highest outmigration of high income earners (defined as annual income over $200,000) relative to in-migrants (attraction ratio: 53). New York is followed closely by Illinois, the District of Columbia and New Jersey, which are all losing the over-$200,000-a-year crowd at a faster pace than California.

The big winners in terms of affluent migration tend to be historically poorer states, mainly in the Sun Belt and the Intermountain West. Florida has an attraction ratio for people earning over $200,000 a year of 223, the highest in the nation, followed by South Carolina, Montana, Idaho and North Carolina.

The IRS database used by Kotkin and Cox is the same one that Peter Nelson of Center of the American Experiment analyzed with respect to Minnesota. Nelson’s paper, titled Minnesotans on the Move to Lower Tax States 2016 was a bombshell. Nelson found that since 2000, Minnesota has experienced a net outflow to other states in every year.

The numbers, and the household incomes that those leaving the state take with them, have continually increased. In 2014, Minnesota lost a shocking $948 million in net household income to other states. When it comes to affluent families, Minnesota is one of the nation’s least popular states. In 2014 it ranked 47th in net gain or loss of households with incomes over $200,000.

When Americans decide where they want to live, they take into account many factors. Among those factors are taxes, regulations and economic opportunity. In this competition, the pattern is blindingly obvious: blue states are losing, and red states are winning.