 Originally published at Kansas Policy Institute. Recent Internal Revenue Service (IRS) data underscore a significant trend: people and income continue moving from high-tax to low-tax states. The pandemic lockdowns accelerated this movement, and even as life returns to a semblance of normalcy, the exodus continues unabated as policies matter. The IRS reports migration data between states reveal that in 2022, California topped the list of net losers in adjusted gross income (AGI), shedding $23.8 billion. Other high-tax, blue states, New York, Illinois, New Jersey, and Massachusetts, were the biggest losers, collectively losing billions in AGI. Conversely, low-tax, red states like Florida, Texas, South Carolina, Tennessee, and North Carolina emerged as the biggest net gainers, with Florida alone attracting $36 billion in AGI. According to the Wall Street Journal, the flight from blue, high-tax states far surpasses pre-pandemic levels. California’s income loss in 2022 was nearly three times that of 2019. New Jersey saw a record net income loss, largely due to fewer New Yorkers relocating across the Hudson River. Although lower than during the pandemic, New York’s AGI loss was still about 50% higher in 2022 compared to 2019. This migration pattern illustrates a clear preference for states with lower taxes, less regulation, and more business-friendly environments. The top income-gaining states share common pro-growth policies that promote economic growth, highlighting the significant impact of state policies on migration decisions as people move with their feet. Kansas: A State of Concern For Kansas, the story is one of consistent outmigration. The net loss from domestic migration in 2022 marked the 28th out of the last 30 years, with a staggering loss of over $600 million and more than $2 billion over the last five years. This represents the second-highest loss in three decades, second only to 2017 when the state imposed its highest tax increase. The average state outmigration loss in Kansas, about $76,000 per return, indicates a broad spectrum of incomes are leaving. Moreover, Kansas’ biggest gains came from higher-tax states, and its losses went to lower-tax states. Johnson County, often hailed as Kansas’s economic engine, accounted for over half of the state’s AGI loss at $357 million in 2022. This marks the fifth out of the last six years that Johnson County has experienced a net loss. Despite having about 20% of the state’s population, it has borne a disproportionate share of the AGI loss, which coincides with efforts to shift the county politically left and impose significant property tax hikes that reduce affordability. Considering data from the Kansas Policy Institute’s Green Book and the Tax Foundation, it becomes clear that Kansas is not alone in facing these challenges. However, the extent of the problem in Kansas is particularly alarming compared to other states. The IRS data indicate that while many states have rebounded or stabilized post-pandemic, Kansas continues to struggle with significant outmigration. Economic and Policy Implications for Kansas The significant outmigration from Kansas has several implications:
Kansas’s Path to Prosperity In response to these challenges, Kansas must adopt a comprehensive approach that includes responsible budgeting, tax relief, and the removal of barriers to work and education. Here are some key policy recommendations:
Addressing Migration Trends The migration trends underscore the importance of adopting free-market, pro-growth policies prioritizing economic freedom and personal responsibility. Kansas can learn from states that have successfully attracted residents and income by implementing policies that reduce the size of government, lower taxes, and eliminate burdensome regulations. The continued outmigration from Kansas highlights the urgent need for policy reforms that can reverse this trend. By learning from the successes of states that have managed to attract people and income, Kansas can chart a path toward a more prosperous future. Addressing the underlying issues driving residents away is crucial to ensuring the state’s long-term economic stability and growth.  Improve Immigration by Strengthening American Values with Dr. Veronique de Rugy| LPP ep. 1026/25/2024
Join me for Episode 102 of the Let People Prosper Show to hear a deep discussion with the fantastic Dr. Veronique (Vero) de Rugy, the George Gibbs Chair in Political Economy and Senior Research Fellow at the Mercatus Center at George Mason University, who migrated from France to America.
We Explore: -How the entrepreneurial spirit contributes to immigration between countries. - What the differences are between national conservatism and classical liberalism. - Which policies would improve the economic and fiscal picture. Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insights from me, my research, and ways to invite me on your show, give a speech, and more.  Originally published at American Institute for Economic Research.
The Economist recently compared Joe Biden’s and Donald Trump’s economic records, concluding Biden wins so far. While the article raises valid points, it excludes key details that make the findings questionable. Ten months from now, there’s a high likelihood Biden and Trump could go head-to-head again for the presidency, especially after the results from the Iowa caucus. But voters should be informed about the effects of their policies on key issues like immigration, inflation, and wages. Starting with a divisive bang, let’s look at each leader’s track record concerning immigration. The Economist correctly noted that apprehensions along the southern border were much lower under Trump. They increased by the most in 12 years during the economic expansion of 2019, decreased early in the COVID-19 pandemic when people could be turned away for public health concerns, and rose again during the lockdowns. While some may see apprehensions rising between Trump and Biden as a loss for Biden, I see it as a loss for both. This metric is somewhat unreliable, given one person can be caught and counted multiple times, and those caught are a subset of total migrants. The truth is immigration is good for the economy, but government failures create unnecessarily complex barriers against legal immigration, contributing to the humanitarian crisis along the Mexico border today. Neither President has pushed for what’s needed (market-based immigration reforms) both lose. Inflation is another hot topic, especially for Biden. The Economist hands the win to Trump, as inflation was far lower during his presidency. But can we give him the credit? Remember, Trump pressured the Federal Reserve to reduce its interest rate target and expand its balance sheet, which was inflationary. His deficit spending skyrocketed during the lockdowns and was mostly monetized by the Federal Reserve, contributing to what was always going to be persistent inflation. Biden made this deficit spending and resulting inflation much worse. Add in the Fed’s many questionable decisions, such as doubling its assets, cutting and maintaining a zero interest rate target for too long, and focusing too much on woke nonsense, and we can see how this was always going to be persistent inflation. But even the Fed’s latest projections indicate it won’t hit its average inflation target of two percent until at least 2026. Likely, it will cut the current federal funds rate target range of 5.25 percent to 5.5 percent three times this year, keep a bloated balance sheet to finance massive budget deficits, and run record losses. If so, this inflation projection is too rosy. Some of Trump’s policies helped stabilize prices, including his tax and regulation reductions. But he still allowed egregious spending. Biden has doubled down on red ink that has contributed to the recent 40-year-high inflation rate. While inflation has been moderating recently under Biden, Trump gets the win. Of course, neither Presidents nor Congress control inflation, as that job is the Fed’s, but its fiscal policies influence it. When it comes to inflation-adjusted wages, The Economist grants a tie. Let’s consider real average weekly earnings that include hourly earnings and hours worked per week, adjusted for the chained consumer price index, which adjusts for the substitution bias and has been used for indexing federal tax brackets since the Tax Cuts and Jobs Act of 2017. Trump’s era witnessed a robust upward trajectory of real earnings, with considerable gains by lower-income earners, thereby reducing income inequality. We must acknowledge a real wage spike in 2020 during Trump’s lockdowns, marked by the loss of 22 million jobs and various challenges. To maintain a fair analysis, I disregard this spike. A year later, real wages demonstrated a decline under Biden. Extending the timeframe to two years later, real wages remain relatively flat to slightly increased. To provide a contextual understanding, when we consider the trend under Trump, excluding the 2020 spike, real wages for all private workers or production and nonsupervisory workers fall below those observed during Biden. It’s worth noting, however, that these wages have been higher since 2019, albeit nearly stagnant for all private workers. Given real earnings, I agree with The Economist that Trump and Biden are tied. While much more can be said for each President’s policies, continuing to add context when making assessments is crucial. I give Trump a nuanced “win” overall because his policies supported more flourishing during his first three years until the terrible mistake of the COVID lockdowns, with its huge, long-term costs. I should note that I made a strong case inside the White House for no shutdowns and less government spending but, alas, my efforts, and those by others, lost to Fauci, Birx, and Trump. Given the improved purchasing power during his presidency, Trump receives better poll ratings than Biden after three years of their presidencies. But this win doesn’t mean that Trump’s record is best regarding these issues, protectionism, and more. Let’s hope free-market capitalism, the best path to let people prosper, is on display this November, no matter who is on the ballot. LPP Bonus Episode | Why Tariffs, Immigration & Antitrust Laws can be HARMFUL w "The Immigration Guy"9/6/2023
In this bonus episode, we discuss: 1) How immigration helps the U.S. economy and the truth behind common immigration myths, such as fear that immigrants "steal jobs," 2) Why the tariffs against China didn't work, and the tyranny of excessive government spending; and 3) Dangers of antitrust laws, and the importance of letting markets work. Be sure to check out and subscribe to “The Immigration Guy” podcast.
You can watch this episode and others along with my Let People Prosper Show on YouTube or listen to it on Apple Podcast, Spotify, Google Podcast, or Anchor. Please share, subscribe, like, and leave a 5-star rating! For show notes, thoughtful insights, media interviews, speeches, blog posts, research, and more, check out my website (www.vanceginn.com) and please subscribe to my newsletter (www.vanceginn.substack.com), share this post, and leave a comment. |
Vance Ginn, Ph.D.
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