Taxes Matter

Posted in Weekly Newsletter on by .

minnesotaDemocrats holding office in high-tax states frequently claim their taxing and spending burdens don’t matter to people choosing a good place to live. A couple of years ago, Minnesota Governor Mark Dayton famously took a pot shot at Wisconsin’s Scott Walker over Minnesota’s growing tax bite.

But two years down the road, more people are moving out of Minnesota than are leaving Wisconsin and a nationwide survey suggests taxes—Minnesota’s are more than 48 percent higher per capita than Wisconsin’s—may have something to do with it.

Both states have raw winters, retiring baby-boomers and net out-migration, at least to the extent a survey of two major moving companies can identify trends.

However, Wisconsin has a slightly larger population and is a couple of percentage points better off than its western neighbor in terms of retaining residents and the flow of relocations into and out of the state—a critical consideration in maintaining the tax base. But it’s remarkable that some insist this doesn’t matter. A quick Internet search indicated emphatically otherwise.

The Midwest’s hot spot for outmigration is Illinois, with 62 percent of the moving vans headed out of state even with per capita taxes less than a full percent higher than Wisconsin’s.  Despite Governor Bruce Rauner’s admirable fiscal reform efforts, that’s unlikely to get better or even stay the same in coming years.

Of interest in the late-June CNBC survey is that only two states with higher per-capita taxation than Wisconsin—California and Vermont—have more people moving in than out. Vermont sends a self-identified Socialist to the U.S. Senate and Californians are evidently unashamed of their recidivism in electing Jerry Brown governor, so presumably people moving to those states know what they’re in for.

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