Taxes and Migration

Minnesotans on the Move to Lower Tax States

Preview:

Taxes and Migration notes Minnesota’s below-average population growth since the turn of the century. It quantifies the role played in that by a persistent net loss of residents to other states. It summarizes the findings of a sizable body of empirical research which finds that people move in response to taxes. It demonstrates that our state’s taxes are high, relative to those of other states, so that we should expect to see the net loss of residents to other states that we do. It demonstrates this relationship between tax rates and migration flows with data specifically relating to Minnesota. Finally, it explains why this might cause problems for our state in coming years: first, through deskilling our labor force by driving higher productivity workers from the state leading to lower per capita incomes, and second by driving out of Minnesota higher earners who contribute a disproportionate amount of state income tax revenues.

This report recommends a clear course of action to help remedy our state’s persistent net loss of residents: to reduce domestic out-migration from Minnesota, to retain people and attract new ones, state policymakers should cut our state’s taxes

A full copy of the report can be viewed here.