The vast majority of households that move to a different county or state indicate employment, family, and housing-related matters are the main reason behind their move.
Thompson writes further that on an individual level, those with higher incomes tend to have stronger financial and community ties to where they live, discouraging interstate moves. Back on the statewide level, the decrease in migration to a high-tax state is actually vastly offset by increased revenue from high taxes, resulting in net benefits to the state economy and job market:
States raising taxes will see somewhat fewer migrants choose their state as a destination, but offset and reverse this impact when they use increased tax revenues in ways that attract people and create jobs. Because the migration impacts of unemployment are so much greater than for taxes, when states use additional revenue to create jobs and lower unemployment, the net effect is to decrease out- migration and attract more people to the state.
Young and Varner’s study (.pdf), set to be published in next month’s edition of the National Tax Journal, examines the consequences of New Jersey’s so-called “millionaire tax,” a 2004 tax increase of 2.6 percent on any New Jerseyite making more than $500,000 a year. Young and Varner found that not only did those hit with the tax not leave in any significant numbers but that earners making just below the $500,000 cutoff left at about the same rate, suggesting that even among top earners who’ve moved from New Jersey since 2004, taxes have had very little impact on their decisions to do so.