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Americans Fleeing High Tax States for Growth Corridors

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Two men in business suits struggling to roll a giant stone ball labeled "tax" up a steep hill.

By Elnur @ Shutterstock.com

UPDATE 1.24.22: For decades, each year a trickle of Americans decided they had had enough of the liberal politics of their states, and of being treated more like a piggy bank by politicians than as constituents. In 2020, that trickle turned into a torrent, spurred by Americans who saw Democrats encourage deadly riots and looting, and lock down states with COVID rules that simply didn’t make sense. A move to leave big blue blob cities and find Super States began in earnest. Now, an entire economy has sprung up around people leaving blue states for the freedom they’ll find in America’s Super States. One example is Blue Line Movers, a moving company specializing in helping conservatives leave New England for the free state of Florida. The NY Post reports:

Former teacher Karen Ball was living in New Hampshire when she decided it was time to downsize and sell her four-bedroom home.

“I had always spent my summers in Maine, so I thought I’d go there,” the 56-year-old told The Post. But when COVID hit, things changed. “I didn’t like what was going on. There were riots over the summer and I didn’t want to go to work and have to be quiet about my thoughts. Due to the political climate, I knew I had to get out of the Northeast.”

A conservative, she felt alienated in New England, where she’d lived her entire life. So in the fall, the mother of three joined the ranks of people fleeing Northern blue states — because of crime or COVID mandates — to what Gov. Ron DeSantis like to calls “the free state of Florida.” She bought a condo near Fort Lauderdale, and booked a moving company but was disgusted when they doubled their quote after she put down a deposit.

Then she saw an ad on Facebook for Florida-based Blue Line Moving, who are becoming famous among conservatives who want to move to red states. The guys in the photo were wearing “Let’s Go Brandon” T-shirts (a viral dig at President Biden). Ball said it was serendipitous.

“I knew right away I wanted to support them. I was proud of them for speaking up. And when a business is veteran-owned, there is a code of conduct and values already instilled in them,” said Ball, whose daughter is former military.

She was delighted with the service. “I was very satisfied. My stuff was here in a week and after the guys brought my stuff in, we were chanting, ‘Let’s go Brandon.’”

Rourke’s rising star

Owner John Rourke, a 16-year Army veteran is openly supportive of law enforcement — thus the name of his business, which is a reference to the “thin blue line” of the police. But this fall, he formally outed himself as a conservative on Fox News after witnessing the humanitarian crisis at the border.

In September, Rourke, 43, made a trip to Del Rio, Texas, with an annual trash clean-up he organizes. There, he saw migrants being pulled from the river and swarms of Haitians living under the bridge, and recorded video of the scene. The footage landed him spots on Tucker Carlson’s show and “Fox & Friends.”

He said business has been booming ever since.

“People call and say I saw you on ‘Tucker,’ I want to use you if you are in my price range,” Rourke told The Post. “Last January I brought in $58,000 and [this year], I am already at $130,000 for the month,” said Rourke, adding that he had a woman specifically request that his crew wear the “Let’s Go Brandon” shirts.

In November, Donald Trump Jr. hired Blue Line to transport a piano and his fiancée Kimberly Guilfoyle shared a picture with the movers on Instagram — wearing the same T-shirts that Ball liked. That’s when business really ramped up. He’s since moved Congressman Brian Mast and Sean Hannity.

“I want to angle my business to be the mover of the Conservative party,” said Rourke, whose trucks feature an American flag with the blue line — a symbol of support for law enforcement officers.

Originally posted on June 14, 2021.

 

You already know that America’s growth corridors are where the action is for businesses who want to keep their own money and thrive. The Census has confirmed as much, and the economic numbers do too. Now the IRS is coming in with another analysis to put the final nail in the coffin for high tax states.

The Wall Street Journal explains that new IRS data show vast income losses for high tax states, with low tax, growth corridor states the winners in the migration trend. Allysia Finley and Kate LaVoie report:

New IRS data compiled by research outfit Wirepoints illustrate the flight from high- to low-tax states. The chart above shows the adjusted gross income (AGI) that states lost or gained from population migration in 2019 as a share of their total AGI. States in the Sun Belt and Mountain West generally gained income while those in the Northeast and Midwest lost income.

Retirees in the Midwest and Northeast are flocking to sunnier climes. But notably, states with no income tax (Florida, Nevada, Tennessee and Wyoming) made up four of the 10 states with the largest income gains. On the other hand, five of the 10 states with the greatest income losses (NY, Connecticut, New Jersey, Minnesota, California) ranked among the top 10 states with the highest top marginal income tax rates.

Florida gained a whopping $17.7 billion in AGI including $3.4 billion from New York, $1.2 billion from California, $1.9 billion from Illinois, $1.7 billion from New Jersey and $1 billion from Connecticut. California, on the other hand, lost $8.8 billion including $1.6 billion to Texas, $1.5 billion to Nevada, $1.2 billion to Arizona and $700 million to Washington.

Taxpayers who moved from high-tax states to Florida had significantly higher AGIs. For instance, Illinois migrants to Florida had an average AGI of $182,000—about twice as much as those who moved from Illinois to other states. The average taxpayer who moved to Florida from the other 49 states had an AGI of $110,000, which is about twice the average household income. By contrast, the average taxpayer who left Florida had an AGI of just $66,000.

In sum, high-tax states aren’t just losing more taxpayers—they are losing higher-income ones. Similarly, low and no income states are generally gaining more taxpayers who also earn more.

Read that last paragraph again–“high-tax states aren’t just losing more taxpayers—they are losing higher-income ones.” When state income tax brackets are progressive (meaning the high income earners pay a higher percentage of their income in taxes), it hurts the state exponentially more when a high income earner leaves.

That’s the scenario facing places like Illinois, New York, and Connecticut. Not only are they losing residents, but the ones who are leaving are the most important to balancing the states’ bloated budgets.

Action Line: If you feel like your money isn’t being treated well by your state, look for a better America. Build an island for you and your family in a state where your money and time are respected, and you can focus on something other than paying your tax bill. If you need help staying serious, click here to sign up for my free Survive and Thrive newsletter. I’ll keep your mind on your goals, but only if you’re serious.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.