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How to Discourage Migrants


    Publisher's note: This article appeared on John Hood's daily column in the Carolina Journal, which, because of Author / Publisher Hood, is linked to the John Locke Foundation.

John Hood, John Locke Foundation chairman.
    RALEIGH     The U.S. Census Bureau just confirmed what everyone already suspected: North Carolina now has more than 10 million residents. We've been adding an average of 281 people each day. That's one of the fastest growth rates in the United States.

    Gov. Pat McCrory and other state leaders treated North Carolina passing the 10-million mark as a promising indicator of the continued growth and progress of our state. But perhaps you don't see it that way. Perhaps you believe that there are simply too many people living here - that the place has become overcrowded or is changing too rapidly to suit your tastes.

    If so, I have some great news for you. According to recently published academic research about interstate migration, there are policies that have proved effective in discouraging people from moving to a state. To combat the invasion of North Carolina, we just need to adopt these policies.

    For example, North Carolina could raise tax rates. It turns out that, all other things being equal, people would rather live and work in states with lower taxes than in high-tax states, even if the latter spend more money on public services. Why? Because their higher spending doesn't automatically lead to better public services. But higher taxes do automatically reduce the discretionary incomes of most residents.

    In a 2015 study published by the Journal of Regional Analysis & Policy, for example, two researchers from Jacksonville University looked at factors affecting interstate migration patterns. They found, not surprisingly, that people tend to move southward and westward, seeking warmer climes. They also found that people are attracted to states with lower income-tax rates as well as states with larger fiscal surpluses - in the latter case, I would suggest, because healthy state budgets signal that fiscal crises and tax hikes are less likely to occur in the future.

    Other studies published this year confirmed tax effects on interstate migration among particular groups of people. A Contemporary Economic Policy paper found that military servicemen and retirees tend to seek out lower-tax jurisdictions. In Public Finance Review, three officials from the New Jersey revenue department reported the findings of a study of the effects of past tax hikes on the residency of high-income individuals. They did, indeed, find that some departed the state in response. Still another study in the Journal of Regional Analysis & Policy found that high inheritance, income, and sales taxes all discourage the elderly from moving to a state, although high property taxes did not have the same effect (the researchers speculated that seniors are able to buy or rent less square footage, thus allowing them to limit their exposure to property taxes).

    Finally, a new study in the journal Professional Geographer found that economic freedom in general - including lower and more pro-growth taxes plus lower levels of government spending and regulation - correlates with migration patterns. Again, all other things being equal, Americans appear to prefer to reside in places where governments confiscate less of their money and spend less time telling them what to do.

    Just to be clear about this: these studies don't prove that government taxes and regulations are the only factors influencing interstate migration. Clearly there are many other forces at play. The states with the highest rates of population growth last year were actually North Dakota, Colorado, Nevada, Florida, Texas, Utah, Washington, Arizona, and Oregon. While most of these are red states with high economic-freedom scores, both Washington and Oregon are blue states with relatively light tax burdens but heavy regulatory burdens. Colorado is a purple state with middling ratings in both categories.

    Nevertheless, I want to reassure those of you who are understandably upset about so many people moving here from foreign lands such as Illinois and New York. Don't give up hope. Your best course of action is to vote for politicians who will make North Carolina more like Illinois and New York by increasing taxes and regulations. That ought to fix the problem.





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