Thousands of Americans, many of them Latinos, moved to states with a better quality of life and lower taxes in the last decade, a trend that accelerated in 2021 due to the pandemic, which led states like California or New York to lose population, according to a study by the Tax Foundation.
The covid-19 has caused the United States to see its population stagnant in 2021, a year in which many Democratic states lost population, in favor of more conservative ones with fewer taxes.
It is something that has been talked about for a long time. California, the most populous state in the country and with high fiscal pressure, loses residents to Arizona, Florida or Texas.
The Tax Foundation expert and author of the study, Jared Walczak, told Efe on Thursday that, although people move for many reasons, “taxes are an express part of the calculation” when changing residence.
In the last year, high taxes have motivated migrations that affected many important states, such as the District of Columbia, which lost 2.8% of its inhabitants, and New York (1.8%), while Illinois, California and Louisiana saw their census decline by about 1%.
“They are all notoriously high-tax Democratic-led territories,” Walczak said.
The states that benefited most from internal migration last year were Idaho (with a 3.4% population increase), Utah (2%), Arizona (1.7%), Texas (1.3%) and Arizona (1.7%), led by Republicans, and with low taxes.
Walczak said that Latino workers have followed the trend of moving to pay less taxes and obtain a better quality of life.
“The Latino population also changes according to economic trends,” he said, and this manifests itself in many ways, especially in these times of “high mobility”, where you can work remotely or “go job hunting” anywhere. from the country.
Remote work in particular motivated many people to relocate due to lower taxes, a lower cost of living or a better quality of life.
Companies realize they have a larger workforce than previously thought with remote workers available to them anywhere in the country or state, according to the study.
This affects people, who may move directly in search of lower taxes, or those who go where the jobs and opportunities are.
“Sometimes they move because the taxes are lower, other times because the jobs are better,” he adds.
According to Walczak, states with more competitive tax codes are more attractive to live and work in, with lower taxes that don’t interfere with economic growth and opportunity.
“Many times taxes discourage investment, creation or growth of businesses,” he said.
As an example, he pointed out that the tax burden makes it very difficult to start a business in New York, while it is very easy in Florida, a state that has waived individual income tax, along with Texas, Nevada and South Dakota.
Meanwhile, in California, New Jersey, New York and the District of Columbia, income tax rates are in the double digits, and the latter two states have been raised this year.
Technological giants such as Oracle or Hewlett-Packard announced their departure from California for Texas, a movement that has been followed by great fortunes such as the richest man in the world and founder of Tesla and SpaceX, Elon Musk, who also moved to the Lone Star State .
The study concludes that the picture painted by this population shift is clear: people are leaving high-tax, high-cost states for lower-tax, lower-cost alternatives.
“As states work to maintain their competitive advantage, they must pay attention to where people are moving and try to understand why,” there is their future, he concluded.
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