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Hey, Where’d All the Moving Vans Go?

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As you can see in the map below, Americans are moving to where they’re treated well or at least better than they were. When states treat your savings and investments like their piggy bank, it’s time to look for a better America. Just follow the money.

In my conversation with you this week, you told me about your own move to South Carolina with a rented U-Haul to boot. When it was time to go back north to get the rest of your belongings, U-Haul offered to pay you $500 to reposition a vehicle. It turns out all the vehicles are south of the Mason-Dixon line.

On January 3, U-Haul released its Growth States report for 2022. No surprise, Texas and Florida topped the list for inbound states, and California and Illinois were the states most residents were leaving. U-Haul’s press release reported:

Texas, Florida and the Carolinas were the preferred destinations of one-way U-Haul® truck customers during 2022, ranking as the top growth states on the annual U-Haul Growth Index.

U-Haul transactional data confirms that migration to the Southeast and Southwest U.S. – trends that were amplified and accelerated during the pandemic – continued through last year, although overall DIY moves slowed slightly in most states from the record-breaking number of moves in 2021.

Demand for equipment out of California, Illinois and New York remained strong in 2022, as more people opted to leave areas of the West Coast, Northeast and Midwest. California and Illinois ranked 50th and 49th, respectively, on the U-Haul Growth Index for the third consecutive year, meaning those states saw the greatest net losses of one-way U-Haul trucks.

The U-Haul Growth Index is compiled according to the net gain of one-way U-Haul trucks arriving in a state or city, versus departing from that state or city, in a calendar year. Migration trends data is compiled from more than 2 million one-way U-Haul truck transactions that occur annually across the U.S. and Canada.

Texas is the No. 1 growth state for the second consecutive year and the fifth time since 2016. Florida, which ranks second, has been a top-three growth state seven years in a row.

Action Line: All the vans are in lower tax states for a reason. Americans are fed up with paying politicians to pursue their own goals while crime surges and infrastructure crumbles around them. Start your search for a new home with my 2022 Super States, and click here to sign up for my Survive & Thrive letter to be one of the first to receive my 2023 Super States update.

Janelle Fritts of the Tax Foundation explains:

Americans were on the move in 2022 and chose low-tax states over high-tax ones. That’s the finding of recent U.S. Census Bureau population data and commercial datasets released this week by U-Haul and United Van Lines.

The U.S. population grew 0.4 percent between July 2021 and July 2022, an increase from the previous year’s historically low rate of 0.1 percent. While international migration helped numbers on the national level, interstate migration was still a key driver of state population numbers. New York’s population shrunk by 0.9 percent between July 2021 and July 2022, Illinois lost 0.8 percent of its population, and Louisiana (also 0.8 percent), West Virginia (0.6 percent), and Hawaii (0.5 percent) rounded out the top five jurisdictions for population loss. At the same time, Florida gained 1.9 percent, while Idaho, South Carolina, Texas, South Dakota, Montana, Delaware, Arizona, North Carolina, Utah, Tennessee, Georgia, and Nevada all saw population gains of 1 percent or more.

This population shift paints a clear picture: people left high-tax, high-cost states for lower-tax, lower-cost alternatives.

The individual income tax is illustrative here (though only one component of overall tax burdens, it is often highly salient). In the top third of states for population growth (including D.C.), the average combined top marginal state income tax rate is about 4.0 percent. In the bottom third, it’s about 6.6 percent.

Six states in the top third forgo taxes on wage income (Florida, Texas, South Dakota, Tennessee, and Nevada, as well as Washington, which taxes capital gains income but not wage income), and the highest top rate in that cohort is Maine’s 7.15 percent. Among the bottom third, five jurisdictions—California, Hawaii, New Jersey, New York, and Oregon—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. Six states in the bottom third have local income taxes; only one in the top third does.

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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.