High State Tax Rate? You Probably Want to Move

Photo (cc) by James Loesch

Residents of states with higher state tax burdens are more likely to want to move, a new study shows.

Gallup’s recently released State of the States 2015 study found that residents of states with the highest aggregated state tax burdens are 10 percent more likely to say they would like to move permanently to another state compared to residents of states with the lowest burdens.

This aggregated state burden includes state income, property and sales tax rates and is based on data from the nonprofit Tax Foundation.

Gallup concludes:

Even after controlling for various demographic characteristics including age, gender, race and ethnicity, and education, there is still a strong relationship between total state tax burden and desire to leave one’s current state of residence. …

These data suggest that even moderate reductions in the tax burden in these states could alleviate residents’ desire to leave the state.

For the study, Gallup polled about 500 adults in all 50 states and the District of Columbia and categorized each state into one of five groupings, or quintiles, based on their aggregated state tax burdens.

States in quintile 1 comprise the 20 percent of states with the lowest aggregated state tax burden, and states in quintile 5 comprise the 20 percent with the highest tax burden.

The states whose residents are most likely to wish to move are:

  • New Jersey (which was categorized into quintile 5): 46 percent of residents would move to another state if they had the chance
  • Connecticut (quintile 5): 46 percent
  • Illinois (quintile 4): 42 percent

The states whose residents are least likely to wish to move are:

  • Montana (which was categorized into quintile 1): 13 percent of residents would move to another state if they had the chance
  • Oregon (quintile 1): 17 percent
  • Washington (quintile 1): 19 percent

For a list of each state’s quintile and percentage, scroll down to the end of Gallup’s study. According to Gallup:

Despite having a desire to leave one’s state, few actually report that they intend to move permanently to another state. For example, only 12% of Connecticut residents who report they would like to move say they plan to do so in the next 12 months.

If you had the opportunity, would you like to move permanently to another state or would you prefer to continue living in your current state? Let us know in our Forums. It’s a place where you can swap questions and answers on money-related matters, life hacks and ingenious ways to save.

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