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2021 nyc income tax brackets4/19/2024 Both companies see states like California, Illinois, Massachusetts, and New Jersey among the biggest losers, and states like South Carolina, North Carolina, Florida, Tennessee, and Texas among the largest net gainers. experienced net outbound migration.ĭata released last week from U-Haul and United Van Lines, while less robust than Census data-and undoubtedly influenced by these companies’ geographic coverage-show similar overall migration patterns. Meanwhile, of the 25 lowest-ranking states on the Index, 16 and D.C. It is also worth noting that on the 2023 State Business Tax Climate Index, which evaluated the competitiveness of state tax structures as of July 1, 2022, of the 25 top-ranking states, 20 experienced net inbound migration. Of the 12 states that levy single-rate, as opposed to graduated-rate, taxes on wage and salary income, all but four (Illinois, Michigan, Mississippi, and Pennsylvania) experienced net inbound migration. Just as states with lower income tax rates-or no income tax at all-have proven highly attractive to interstate movers, so have states with more neutral tax structures. Six states in the bottom third have local income taxes only one in the top third does. peers.Īmong the bottom third, five jurisdictions-California, Hawaii, New Jersey, New York, and the District of Columbia-have double-digit income tax rates, and (excepting Alaska, with no income tax), the lowest rate is in Pennsylvania, where a low state rate of 3.07 percent is paired with some of the highest local income tax rates in the country. Even the highest top marginal rate in that cohort- Maine’s 7.15 percent-is still lower than the average top rate in the bottom third of states, and lower than many of its Northeastern U.S. In the bottom third (including D.C.), it’s 3.5 percentage points higher, at about 7.3 percent.įive states in the top third forgo taxes on wage income (Florida, South Dakota, Tennessee, and Texas, as well as Washington, which taxes capital gains income but not wage income). In the top third of states for population growth attributable to domestic migration, the average combined top marginal state income tax rate is about 3.8 percent. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. imposes a progressive income tax where rates increase with income. Though only one component of overall tax burdens, the individual income tax An individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. with tax burdens per capita at or above the national average, 14 of those jurisdictions experienced net outbound migration. Of the 32 states whose overall state and local tax burdens per capita were below the national average in 2022, 24 experienced net inbound migration in FY 2023. , high-cost-of-living states in favor of lower-tax, lower-cost alternatives. This population shift paints a clear picture: Americans are leaving high- tax A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. At the other end of the spectrum, South Carolina saw the greatest population growth from net domestic inbound migration (1.6 percent), followed by Delaware (1.0 percent) and North Carolina, Tennessee, and Florida (all 0.9 percent). Not far behind was California, which lost 0.9 percent of its residents, followed by Hawaii (0.8 percent), Alaska (also 0.8 percent), and Illinois (0.7 percent). Census Bureau’s most recent interstate migration estimates show that New York lost the greatest share of its population (1.1 percent) to other states between July 2022 and July 2023. While international migration contributed to population growth at the national level, interstate migration was the key driver of net population changes at the state level. population grew 0.49 percent between July 2022 and July 2023, an increase from the previous year’s 0.37 percent. Census Bureau interstate migration data and commercial datasets released last week by U-Haul and United Van Lines. Americans were on the move in 2023, and many chose low-tax states over high-tax ones.
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