Thousands of Americans, many of them Latino, have moved to states with better quality of life and lower taxes in the last decade, a trend that was accelerated in 2021 by the pandemic, which led to states such as California or New York to lose population, according to a study by the Tax Foundation.
Covid-19 has caused the United States to have its population stagnant in 2021, a year where many Democratic states lost population, in favor of other more conservative and with less taxes.
It is something that has been talked about for a long time. California, the most populous state in the country and with a high tax burden, 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 would have motivated migration that affected many important states, such as the District of Columbia, which lost 2.8% of inhabitants, and New York (1.8%), while Illinois, California and Louisiana saw their census drop by about 1%.
“All of these are Democratic-led territories with notoriously high taxes,” Walczak noted.
The states that were most favored by internal migration last year were Idaho (with a population increase of 3.4%), Utah (2%), Arizona (1.7%), Texas (1.3%) and Arizona (1.7%), led by Republicans, and with low taxes.
Walczak said Latino workers followed the move trend to pay less taxes and get 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 looking for a job” 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.
Businesses find they have a larger workforce than previously thought with remote workers at their disposal 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 with, with lower taxes that do not interfere with economic growth and opportunity.
“Many times taxes discourage investment, creation or growth of businesses,” he said.
As an example, he highlighted 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 given up collecting 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 in the last two states they were raised this year.
Tech giants such as Oracle or Hewlett-Packard announced their departure from California for Texas, a move 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 change is clear: people are leaving states with high taxes and high costs, for alternatives with lower taxes and lower costs.
“As states work to maintain their competitive advantage, they must pay attention to where people are moving and try to understand why,” there is your future, he concluded.