Do people leave after a state raises income tax?
Not in a way this data can see. We looked at the 41 states with an income tax, 2001–2024. Net migration is people moving in from other states minus people moving out. When a state raises its income tax by 10% compared with other states, net migration shows no fall this data can detect in any of the five years after. The estimates for two to five years later sit close to zero. Each has a likely range (a 95% interval), and none of those ranges goes below −0.88per 1,000 residents a year. In the year of the rise itself, migration tends to be a little higher. That is what a boom looks like: good times fill the state’s budget and draw people in at the same time.
What is being compared
For each state and year, we take net domestic migration: people arriving from other states minus people leaving for them, per 1,000 residents, from Census population estimates. We line it up with the change in the state’s income tax rate that year and in each of the five years before. (The rate here is the share of income the state actually collects in tax. See below.) Each state is compared only with itself over the years, and each year only with the same year in other states. So nothing fixed about a state (its climate, its history) and nothing that hit the whole country at once (a recession, the pandemic) can explain the results. The calculation also allows for the fact that a state’s years tend to resemble each other. Figures are per 10% rise in the rate compared with the average state. For scale, Illinois’s 2011 increase, from 3% to 5%, was about a 40% relative rise.
The results
Each dot is an estimate: how much net migration per 1,000 residents changed after a 10% relative rise. Each bar is the likely range for that estimate (a 95% interval). A bar that crosses zero means the change could easily be chance.
State income tax
41 states, migration years 2001–2024, 943 state-years. All six years added up: +1.47 per 1,000 residents (likely range −1.24 to +4.17).
State income tax, after adjusting for the state's own income growth
41 states, migration years 2001–2024, 943 state-years. All six years added up: +0.53 per 1,000 residents (likely range −1.78 to +2.83).
State and local income tax
41 states, migration years 2018–2024, 287 state-years. All six years added up: +1.31 per 1,000 residents (likely range −0.43 to +3.05).
State and local income tax, after adjusting for the state's own income growth
41 states, migration years 2018–2024, 287 state-years. All six years added up: +1.55 per 1,000 residents (likely range −0.14 to +3.24).
What this can and cannot say
- The rate is effective, not statutory.The statutory rate is the one written in the law. The effective rate used here is the income tax the state actually collected, divided by what its residents earned. So it moves when the law changes, and also when incomes do. A boom in capital gains (profits from selling stocks or property) raises it with no change in the law. Adjusting for the state’s own income growth takes out much of that, and the answer stays the same. The same question, asked about the top rate written in state law, is on its own page.
- Everyone, not the top. Net migration counts everyone who moves. High earners pay most of the tax, but they are a small share of movers. So a real departure of high earners could be too small to show up in this figure. IRS counts of people earning $200,000 or more moving between states, from 2012, are compared with changes in the top rate written in law on the top-rates page.
- The state-and-local version is short.Local income taxes, such as those of New York City, Maryland’s counties and cities in Ohio and Pennsylvania, have yearly figures only from 2012. A change is only counted between two years measured the same way. So this version’s migration years start in 2018.
- Association only. States do not raise taxes at random. They raise them when budgets are under strain, which is also when other things are happening. No estimate here can separate what the tax did from everything else.
Sources: Census Annual Survey of State Government Tax Collections (from 1970), Census local government finances (every local income tax), BEA state personal income, and Census population estimates of net domestic migration (2001–2024, without July 2009 to July 2010, which falls between two releases).
Everyone who moves is counted here. For high earners and millionaires alone, see where the rich move.