And they are completely stupid. Here’s why.
If we take the median income by state, the median tax rate by state, and the median rent by state, we can generate a graph of disposable income.
We can then graph this and find our nice R squared of 0.11 between Cook Partisan Voting Index and disposable income after rent and taxes. Positive PVI scores are Democratic in my dataset. Flip a coin, I chose D+ to be positive. It doesn’t change the math either way.
People who live in Democratic states have more disposable income after rent and taxes on average than people who live in Republican states.
This is further complicated by the reality that the economic situation in San Jose and Madera are completely different. But we are talking about moving across state lines.
Also this idea that large Democratic states are getting drained of residents by Republican states is contrary to reality again, because the state with the lowest population growth is the communist mecca worshiping soy latte drinking libtards of… West Virginia! With a population decline of -3.2% from 2010-2020.
States which have lost some population in the last three years do include California and Illinois, but also include states like West Virginia, Mississippi, Michigan, Ohio, Pennsylvania, Louisiana, New Mexico, Rhode Island, and Oregon. There is no clear line between partisan alignment and population growth.
A lot of the population change is described by nothing more than population. Idaho has the fastest population growth, but it is also a small state. Texas and Florida are seeing the largest population growth, but they are two of the 5 largest states. Same goes for California and New York which are losing population.
Small states grow at faster rates. WoW. Much math. Very impress.
Basically, moving states simply to pay lower taxes is generally not going to make a significant difference to taxes owed, it just means you will move from a state with clear income tax to a state which will slowly nickle and dime you with a higher sales tax rate. You tend to find lower incomes and less disposable income in these states with “low taxes” whose tax rates are still 9-10% when you also account for property and sales tax, and the differential is smaller than the difference you will see simply by changing how you do your deductions.
Moving to a lower taxed state for tax reasons in retirement also doesn’t make a lot of sense because you should be using a Roth IRA, so tax rate in retirement is 0 anywhere you go. That makes a much bigger impact than any states specific tax rates ever will, because you still need to pay your federal income tax, which is higher.
Of the top 12 states with disposable income after rent and taxes, only two are Republican, one is Alaska which is unusual because of its natural resource boon, and the other is Utah, the forever outlier with a tax rate on par with that of Minnesota and Colorado.
But again, moving states to lower your taxes does not make financial sense. Moving states however for economic opportunity does, in which case the clear winners are New Hampshire, Maryland, Alaska, New Jersey, and Minnesota. Only one of the states is Republican.
That’s basically it. Ask people for their data, and be skeptical of people who don’t show you their work.
Here are my references:
References:
https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_income
https://www.rentcafe.com/average-rent-market-trends/us/
https://en.wikipedia.org/wiki/Cook_Partisan_Voting_Index