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The Impact of Taxes on Migration in New England

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  • Jeffrey Thompson

Abstract

Evidence from surveys of migrating households, the existing economic literature, and new analysis using data from the Internal Revenue Service all suggest that taxes do not play any notable role in causing people to leave a state. The most important factors in influencing household migration are employment and family-related reasons. If anything, higher state income taxes decrease the number of people leaving a state. Taxes do appear to influence the choice of which state to live in once a person has decided to move, but the impact is modest. If states use the revenues from higher taxes to create jobs, reduce unemployment, and reduce property crime, the small negative impacts from taxes can be easily overcome.>> Download the full study>> Download the four-page research briefs: > New England > Connecticut > Maine > Massachusetts > New Hampshire > Rhode Island > Vermont>> Download the regional press release

Suggested Citation

  • Jeffrey Thompson, 2011. "The Impact of Taxes on Migration in New England," Published Studies migration_peri_april13, Political Economy Research Institute, University of Massachusetts at Amherst.
    • Handle: RePEc:uma:perips:migration_peri_april13
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    File URL: https://per.umass.edu/fileadmin/pdf/published_study/Migration_PERI_April13.pdf
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    References listed on IDEAS

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    1. Feldstein, Martin & Wrobel, Marian Vaillant, 1998. "Can state taxes redistribute income?," Journal of Public Economics, Elsevier, vol. 68(3), pages 369-396, June.
    2. Greg Kaplan & Sam Schulhofer-Wohl, 2012. "Interstate Migration Has Fallen Less Than You Think: Consequences of Hot Deck Imputation in the Current Population Survey," Demography, Springer;Population Association of America (PAA), vol. 49(3), pages 1061-1074, August.
    3. Andrew Leigh, 2005. "Can Redistributive State Taxes Reduce Inequality?," CEPR Discussion Papers 490, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    4. Jon Bakija & Joel Slemrod, 2004. "Do the Rich Flee from High State Taxes? Evidence from Federal Estate Tax Returns," Department of Economics Working Papers 2004-12, Department of Economics, Williams College.
    5. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
    6. Jeffrey Thompson, 2011. "Costly Migration and the Incidence of State and Local Taxes," Working Papers wp251, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Alicia Sasser, 2009. "Voting with their feet?: local economic conditions and migration patterns in New England," New England Public Policy Center Working Paper 09-1, Federal Reserve Bank of Boston.
    8. Young, Cristobal & Varner, Charles, 2011. "Millionaire Migration and State Taxation of Top Incomes: Evidence From a Natural Experiment," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 255-283, June.
    9. Stephen Gibbons & Stephen Machin, 2008. "Valuing school quality, better transport, and lower crime: evidence from house prices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(1), pages 99-119, spring.
    10. Timothy J. Bartik, 2009. "What Proportion of Children Stay in the Same Location as Adults, and How Does This Vary Across Location and Groups?," Upjohn Working Papers 09-145, W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Petr Procházka, 2020. "Jurisdictions with lowest effective tax rates in the post-BEPS landscape - CbCR evidence and implications," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2020(1), pages 33-52.

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