Millennials, families and retired people will only take so much of high state income taxes, outrageous regulations, high cost of living and bad economic policies.
Politically liberal blue states are losing productive citizens in droves to successful, low tax, business-friendly states – states that have few regulations and lower living costs.
The exodus of residents over the past 2 years was most pronounced in New York, California and Illinois.
California has the highest marginal state income tax rate by far – 13.3% — and people are fleeing.
New York’s income tax rate of 8.82% is the 6th highest rate nationwide.
With the federal tax deduction for state income taxes and property taxes limited to $10,000 under the new Tax Cuts & Jobs Act, the mass exodus of high-income earners from these 2 states will only increase this year.
Other liberal states suffering a high rate of out-migration are Pennsylvania, the purple state of Michigan, and far-left Massachusetts.
Here are the top 5 reasons individuals and businesses are fleeing blue/liberal states for Republican red states:
- High state income taxes.
High income earners with high property taxes and no children qualifying for the higher child tax credit may owe more federal tax under the Tax Cuts & Jobs Act.
These taxpayers may lose more in federal tax deductions than they gain via the lower income tax rates.
- High cost of living.
With property values skyrocketing in large metropolitan areas – particularly in politically liberal cities on both coasts – many moderate-income millennials are priced out of the housing market.
In addition, New York and California respectively have the 3rd and 5th highest gasoline taxes in the nation – adding high commuting costs to the high cost of living.
- Anti-business regulatory environment.
Here are some of general characteristics of blue-state governments:
- They are controlled by socialists and so-called progressives
- Their economic policies are anti-capitalist and anti-free market
- They regulate businesses heavily
These policies drive many businesses – especially small start-up businesses – out of these states because they find it next to impossible to be successful.
I have had a business in California for over 30 years. If I were starting a business today, I wouldn’t be able to make it in California.
- High crime and high traffic congestion.
New York City, Los Angeles and Chicago are the 3 most populous cities in the U.S.
These cities also have high crime rates and heavy traffic congestion…
People want to feel safe … and they don’t want to spend hours every week stuck in bumper-to-bumper commuter traffic…
They want to have more time to spend with family and engaging in leisure activities.
Texas – ranked the freest of the 50 states – has the highest number of immigrants from other states.
The other most common destinations for people leaving blue states are Florida, Arkansas, South Carolina and Tennessee.
It’s no surprise that folks are fleeing high tax, statist governments and moving to free, fiscally responsible states.
What do you think? Write me at [email protected]