Matthew Ladner

Why are Californians Flocking to Arizona? The Impact of Tax Policy on Interstate Migration

Posted on May 24, 2004 | Type: Press Release | Author: Matthew Ladner
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PHOENIX-A Goldwater Institute report released today reveals that states across the country are losing residents en masse to neighboring states that offer lower taxes and better business climates. An analysis of U.S. Census data by Goldwater Institute senior fellow Dr. Matthew Ladner shows a strong statistical link between high taxes and population loss.

The latest findings explain why Californians are converging on Arizona in record numbers. Between 1995 and 2000, nearly 200,000 Californians moved to Arizona, according to U.S. Census numbers. And while California lost 755,000 residents, Arizona gained almost 800,000.

However, the findings also have serious implications for Arizona, which is competing with neighboring states like Nevada, where there is no personal income tax. In fact, almost half of the people who fled California between 1995 and 2000 went to Nevada.

"The evidence is clear that Americans prefer to live and do business in states where taxes are low and relatively simple," Ladner stated. "Nevada, which is very business- and taxpayer-friendly, enjoys the nation's fastest population growth and is one of the five best places to open or expand a business."

As Arizona lawmakers consider a $1 billion budget increase and the tax hikes that will be required to pay for it, they should not ignore the fact that higher taxes will drive a portion of citizens to live, work, and do business elsewhere, to the peril of the state's long-term fiscal health.

The Goldwater Institute study, The Tax Man and the Moving Van: Fiscal Policy and State Population Shifts, is available here.

Contacts: Dr. Matthew Ladner, Senior Fellow, Goldwater Institute, (512) 844-5504, ladner665@yahoo.com

Andrea Woodmansee, Director of Communications, Goldwater Institute, (602) 462-5000 x 226, awood@goldwaterinstitute.org.

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