Americans are on the move for better tax breaks.
Recent reports from Gannett News in New York claim that New York residents are fleeing the state due to oppressive property, income, and school taxes — mixed, in some upstate areas, with a sluggish economy.
New York leads the nation in numbers of people relocating to other states, though its overall population continues to rise due to immigrant populations, according to U.S. Census Bureau statistics. New York also boasts the country’s highest average local and state tax rates at $9,718 per year, or 39% above the national average.
It’s not just individuals and homeowners who are looking for greener pastures of tax reprieve. Businesses are also increasingly choosing to run their headquarters and operations in states with lower tax brackets, which can have a significant impact on a region’s overall revenue and job economy. The Internal Revenue Service estimates that $11 billion of income moved out of New York State between 2012 and 2014.
Similar trends are cropping up on the opposite coast as well. California has the second-highest tax rates at $9,509 in average state and local dues. The tech boom in Silicon Valley and the Bay Area means that businesses in other industry sectors are being driven out because of increasing rent, wages, and taxes.
The Los Angeles Times reports that restaurant chain Jamba Juice will be relocating from California to Texas within the calendar year, marking just the latest in the gradual exodus of commerce. Carl’s Jr., Toyota Motor Corporation, and Occidental Energy have all likewise announced in recent months that they will be relocating company headquarters from California to different states.
Moving — for homeowners and businesses alike — requires substantial upheaval. The average costs of personal relocation within the same state average $1,170, and may range much higher for inter-state distances.
The largest demographic of movers, according to Gannett, are newly-retired baby boomers. Southern states like Florida offer much lower tax rates in addition to their balmy climates. As the middle-aged generation continues to ease into retirement, high-tax states might struggle to keep those baby boomers at home.