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Report: Taxes Barely Affect Decisions To Move Between States

Report: Taxes Barely Affect Decisions To Move Between States

A report released by the Center on Budget Policy and Priorities on Thursday shows that differing tax rates among states have negligible effects on whether or where Americans choose to move. In other words: Rick Perry is wrong.

For years, conservative economists and politicians have touted lower tax rates as a major incentive that draws new residents and businesses to certain states. But according to the CBPP report, not only is this relatively insignificant to potential movers, but may also have detrimental effects on the state.

Cutting taxes may result in the deterioration of important state-funded public services, including education, public safety, parks, roads, and other critical infrastructure, which in turn reduces the state’s attractiveness both to current residents and families looking to find new homes. Instead, factors that were most commonly cited as attractive to movers included employment opportunities, inexpensive housing, and warmer climates.

The rate of interstate migration is actually very low, currently estimated to be around 1.5 to 2 percent of Americans per year, and is projected to drop over the next few years. The vast majority of these individuals said they moved because of “new, transferred, or lost jobs or family-related reasons,” not lower taxes.

migration

Chart via CBPP

Moreover, CBPP’s analysis of Census and IRS data showed that interstate movers are just about as likely to move from a low-tax state to a high-tax state as they are to move in the opposite direction. In fact, over the past 20 years, more people moved from Florida — which has no income tax — to 11 other states with income taxes than residents of those 11 states moved to Florida. When neighboring states that were similar in every aspect aside from tax levels were compared, in many cases, the states with income taxes attracted more new residents that states without. 

Rather, it seems that residents trying to save money would be most motivated to move by lower housing costs. In most cases, mortgage savings far outweighed tax savings for people moving from “expensive” states like California and New York to Florida and Texas, where housing is considerably cheaper. Moving from New York to Texas saves an individual three times as much in mortgage than it does in tax.

Chart via CBPP

Chart via CBPP

This means that states that intend to cut taxes in order to stymie out-migration or attract in-migration are operating from a flawed assumption. And for politicians like Rick Perry, who has made no secret of his attempts to poach businesses and families from other states, promises to catalyze growth and economic prosperity by lowering taxes don’t exactly hold water.

Perry, despite his disastrous 2012 campaign, is likely considering yet another presidential bid. And in preparation for his campaign, the Texas governor has begun airing ads in states with higher tax levels, like New York and Connecticut, in which he urges these states’ residents to make a move to no-income-tax Texas. These ad campaigns have already cost taxpayers $1 million in these two states alone, and have also been run in Maryland, California, Illinois, and Missouri. And while Perry’s office states that “no state tax dollars” are being used to buy each $500,000 ad, this isn’t altogether true.

The “Texas: Wide Open For Business” ads are sponsored by TexasOne, which Perry’s spokeswoman told ThinkProgress draws no money from the state government. However, though “the state does not pay for any of [the campaign’s costs],” the same cannot be said for local governments. ThinkProgress’ review of TexasOne found that at least $465,000 of its funds come from local governments and sales-tax-funded local economic development councils.

So apparently, Rick Perry won’t tax you, but he’ll lie about using your money to talk about how he won’t tax you.

Of course, none of these ads bear any mention of many of the problems that result from Texas’ low tax rates — and, consequently, few state-funded public services — including its high child-poverty rate, high percentage of Texans without health insurance, and continued cuts to public schools.

Texas also ranked 49th in public education spending, so while Perry may be saving taxpayer dollars, he is doing so at the expense of their children’s academic careers.

Unfortunately for Perry, the CBPP’s new report makes it apparent that cutting taxes will not do anything for state in-migration rates. But knowing Perry, he’ll just forget that too.

Photo: Ed Schipul via Flickr

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Global Press Freedom Slips To Decade Low

Global Press Freedom Slips To Decade Low

Washington (AFP) – World press freedom has hit its lowest level in a decade after a regression in Egypt, Turkey and Ukraine, and U.S. efforts to curb national security reporting, a watchdog said Thursday.

A report by Freedom House, which has been conducting annual surveys since 1980, found that the share of the world’s population with media rated “free” was 14 percent in 2013, or only one in seven people.

Meanwhile, 44 percent of the world population lived in areas where the media was “not free” and 42 percent in places where press was “partly free,” the Freedom of the Press 2014 report said.

“The overall trends are definitely negative,” said Karin Karlekar, project director of the report.

Karlekar said press freedom is under attack in many regions of the world.

“We saw a real focus on ‘attacking the messenger,'” she told a news conference, including “deliberate targeting of foreign journalists” in many countries.

“In every region of the world last year, we found both governments and private actors attacking reporters, blocking their physical access to newsworthy events, censoring content, and ordering politically motivated firings of journalists,” she said.

Of the 197 countries and territories evaluated in 2013, Freedom House found 63 rated “free,” 68 “partly free” and 66 “not free.”

The top-ranked were the Netherlands, Norway and Sweden, and the lowest North Korea, which ranked just behind Turkmenistan and Uzbekistan.

The report expressed concern on use of new technologies by authoritarian governments to filter online content and to monitor the activities of reporters.

“Governments have become more sophisticated in their efforts to crack down, even in the online space,” said Karlekar.

The report ranked countries on a scale of zero to 100, with the lowest numbers representing the best score, and also compiled an aggregate global number to measure press freedom.

The average global score was at its worst since 2004, and the percentage of people living with a free news media fell to its lowest since 1996, the report said.

The population figures are due in part to the impact of China, rated “not free,” and India, “partly free.” Those two countries account for more than a third of the world’s population.

The U.S. remained in the ranks of countries with a “free” press, but fell in global rankings to 30th best, tied with Australia.

The report cited a “limited willingness of high-level (U.S.) government officials to provide access and information to members of the press.”

The report also cited an increase in the United States in the number of information requests denied, and the targeting of journalists in criminal investigations.

Karlekar said the worst countries — which included Cuba, Equatorial Guinea, Iran, Belarus and Eritrea — were “black holes for freedom of information” with little access and difficult conditions for journalists.

Countries downgraded to “not free” were Libya, South Sudan, Turkey, Ukraine, and Zambia.

Freedom House said China and Russia continued to maintain a tight grip on locally based print and broadcast media, while also attempting to control views in blogs or by foreign news sources. Both countries introduced additional legal measures to penalize online speech in 2013.

The group said journalists were attacked in 2013 in Ukraine, Turkey and Egypt, and to a lesser extent in Brazil, Venezuela, Sri Lanka, Thailand, Jordan, and Uganda.

On the positive side, 11 countries improved their rankings including eight in sub-Saharan Africa. Ivory Coast was upgraded from “not free” to “partly free.”

Photo: NS Newsflash via Flickr

Obama’s Approval Rating on Economy Reaches New Low

With only 37 percent of registered voters approving his handling of the economy — his lowest numbers yet — according to a McClatchy Newspapers-Marist poll, President Barack Obama is in an uncertain position coming into the 2012 election season. Overall, 45 percent of voters approve of his job performance, and 47 percent disapprove; these numbers have been roughly steady since the end of 2009.

The poll surveyed 1,003 adults, including 801 registered voters, from June 15-23 and also found that nearly two out of three voters disapprove of how Obama is handing the federal budget deficit, which hit a record high of $1.5 trillion. On a hopeful note, the poll found that 50 percent of voters had a favorable impression of him, and two out of three Americans said the country’s economic conditions did not stem from the president’s own policies.

Approval ratings of Congress were also low, with 63 percent of voters disapproving of Republican representatives and 60 percent disapproving of Democrats.