Why do people move from one state to another? And why, in particular, would they choose Utah?
Do they come for a job? Did their current employer move them here? Can they work from home now, making them free to go wherever they want? Or is it the sunshine and the mountains?
Or do they look at tax rates and go wherever the government won’t get so grabby with their wallets?
Do they come for a job? Did their current employer move them here? Can they work from home now, making them free to go wherever they want? Or is it the sunshine and the mountains?
Or do they look at tax rates and go wherever the government won’t get so grabby with their wallets?
That last one may seem a bit far-fetched, but statistics argue otherwise. People move for a lot of reasons, but the IRS, Census Bureau and records from moving-van companies show that the states to which people move also tend to have the lowest and most stable tax rates.
Taxes matter. It may all fall under the general “cost of living” excuse for moving, but my guess is you’ve heard that a lot from friends and relatives.
Utah fares well in these reports, but there are no guarantees for the future.
The Tax Foundation, a nonpartisan research group in Washington, just released a report that examines IRS and Census data from 2019 and 2020. Utah ranks 12th in terms of population changes attributable to interstate migration — in other words, the places people moved to from other states. Utah’s growth from this was 0.54%.
IRS figures show Utah gained 95,012 individual taxpayers from 2019 to 2020, with most (19,821) coming from California.
The No. 1 state was Idaho, with 2.05% growth.
The report said “28 states experienced a net gain in income tax filers from interstate migration — led by Florida, Texas, Arizona, North Carolina, and South Carolina — while 22 states and the District of Columbia experienced a net loss — led by New York, California, Illinois, Massachusetts, and New Jersey.
If you guessed that the first set of states has low tax rates and the last set has high rates, you get a gold star on your forehead.
A few months ago, the Tax Foundation issued a report about migration in 2021, using data from the Census, U-Haul and United Van Lines. Utah finished second in that one, with a 2% increase.
Idaho was No. 1 with 3.4% growth.
As the author of that report, Jared Walczak, wrote, “The pandemic has accelerated changes in the way we live and work, making it far easier for people to move — and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.”
So, what can Utah do to improve this already impressive ranking, besides perhaps changing its name to South Idaho?
The first priority should be to not take growth for granted. Utah’s record as the fastest growing state in the last decade isn’t automatically going to continue, and that has to do with more than taxes.
Felix Homes, a real estate agency in Tennessee, summed this up nicely in a blog post about one of the reasons people choose a place to live — livability.
“These days … people seek lower taxes, a cheaper mortgage, more space, and less traffic — they essentially want somewhere more livable,” the blog post said.
If Utah lets the Great Salt Lake dry away, if it lets air pollution get out of hand, if urban sprawl and poor planning lead to traffic jams and mile after mile of strip malls and bland subdivisions, if crime or urban decay become issues, if schools are underfunded and if housing prices rise to San Francisco levels, tax rates may not be able to compensate.
That’s a lot to think about, and it could be the challenge of this generation of Utahns.
State lawmakers can’t afford to ignore the link between taxes and growth. Generally, Republicans see the income tax as a growth inhibitor, and there are movements afoot to open Utah’s income tax to all state budget needs. That would allow them to reduce income tax rates without directly ha
rming the only funding mechanism for schools.
But many Utahns these days are opening up property tax notices and being shocked by increases. Laws designed to keep those rates low are no match for a year in which about 90 taxing entities raised property taxes, according to the Utah Taxpayers Association.
In-migration helps a state afford the services that keep a community attractive to newcomers and old-timers, alike.
Why do people move? The Tax Foundation’s Jared Walczak acknowledges that sometimes taxes have nothing to do with it. Sometimes, however, they “play an indirect role by contributing to a broadly favorable economic environment.”
Ultimately, every policy decision at every level of government plays a role in keeping a fast-growing state a top destination for people who can choose where to live.
Taxes matter. It may all fall under the general “cost of living” excuse for moving, but my guess is you’ve heard that a lot from friends and relatives.
Utah fares well in these reports, but there are no guarantees for the future.
The Tax Foundation, a nonpartisan research group in Washington, just released a report that examines IRS and Census data from 2019 and 2020. Utah ranks 12th in terms of population changes attributable to interstate migration — in other words, the places people moved to from other states. Utah’s growth from this was 0.54%.
IRS figures show Utah gained 95,012 individual taxpayers from 2019 to 2020, with most (19,821) coming from California.
The No. 1 state was Idaho, with 2.05% growth.
The report said “28 states experienced a net gain in income tax filers from interstate migration — led by Florida, Texas, Arizona, North Carolina, and South Carolina — while 22 states and the District of Columbia experienced a net loss — led by New York, California, Illinois, Massachusetts, and New Jersey.
If you guessed that the first set of states has low tax rates and the last set has high rates, you get a gold star on your forehead.
A few months ago, the Tax Foundation issued a report about migration in 2021, using data from the Census, U-Haul and United Van Lines. Utah finished second in that one, with a 2% increase.
Idaho was No. 1 with 3.4% growth.
As the author of that report, Jared Walczak, wrote, “The pandemic has accelerated changes in the way we live and work, making it far easier for people to move — and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.”
So, what can Utah do to improve this already impressive ranking, besides perhaps changing its name to South Idaho?
The first priority should be to not take growth for granted. Utah’s record as the fastest growing state in the last decade isn’t automatically going to continue, and that has to do with more than taxes.
Felix Homes, a real estate agency in Tennessee, summed this up nicely in a blog post about one of the reasons people choose a place to live — livability.
“These days … people seek lower taxes, a cheaper mortgage, more space, and less traffic — they essentially want somewhere more livable,” the blog post said.
If Utah lets the Great Salt Lake dry away, if it lets air pollution get out of hand, if urban sprawl and poor planning lead to traffic jams and mile after mile of strip malls and bland subdivisions, if crime or urban decay become issues, if schools are underfunded and if housing prices rise to San Francisco levels, tax rates may not be able to compensate.
That’s a lot to think about, and it could be the challenge of this generation of Utahns.
State lawmakers can’t afford to ignore the link between taxes and growth. Generally, Republicans see the income tax as a growth inhibitor, and there are movements afoot to open Utah’s income tax to all state budget needs. That would allow them to reduce income tax rates without directly ha
rming the only funding mechanism for schools.
But many Utahns these days are opening up property tax notices and being shocked by increases. Laws designed to keep those rates low are no match for a year in which about 90 taxing entities raised property taxes, according to the Utah Taxpayers Association.
In-migration helps a state afford the services that keep a community attractive to newcomers and old-timers, alike.
Why do people move? The Tax Foundation’s Jared Walczak acknowledges that sometimes taxes have nothing to do with it. Sometimes, however, they “play an indirect role by contributing to a broadly favorable economic environment.”
Ultimately, every policy decision at every level of government plays a role in keeping a fast-growing state a top destination for people who can choose where to live.
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