Monday, September 12, 2016

Why are high income earners leaving blue states for red ones?

Chapter 9 tells us that a mobile asset has to be indifferent about where it is used, otherwise it will move.  An analysis of 2014 IRS data can tell us who is moving where.  The "attraction ratio" measures how many in-migrants a state receives for every 100 out-migrants.
Overall, the biggest winner — both in absolute numbers and in our ranking — is Texas. In 2014 the Lone Star State posted a remarkable 156 attraction ratio

followed by South Carolina and Florida.
One of the biggest drivers of this trend, in addition to higher income tax rates and regulatory red tape, is housing policy: Blue states enact more building restrictions, which have put family-friendly housing out of reach for broad swathes of the population.

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