Economy, Culture & the Family

New report: Oklahoma’s growth driven by tax policy, housing supply

July 16, 2026

Ray Carter

A new policy brief from the Mercatus Center at George Mason University shows that only 10 states surpassed Oklahoma in attracting net new residents from other states from 2018 to 2023.

The report also shows that the main driver of domestic migration can be summed up in two phrases: lower taxes and easy housing permits that allow new construction.

“The results suggest that over the five-year period, interstate migration in the United States has not been driven primarily by cost of living or climate, as commonly assumed,” wrote Jack Salmon, a research fellow at the Mercatus Center at George Mason University. “Instead, the data point to a different conclusion: Americans are systematically moving to states with lower tax burdens and more flexible housing supply, suggesting that tax and housing policy together play a central role in shaping where people choose to live. States seeking to sustain population growth need to maintain competitive tax structures and allow housing supply to expand in response to demand.”

“Interstate Migration Trends in the United States, 2018–2023: Where Are Americans Moving, and Why?” examined a wide range of factors to determine why people move to certain states and flee from others.

In the brief, Salmon reviewed tax burden, housing supply, broad economic freedom, labor market freedom, partisan preferences, cost of living, government size, population density, climate, and housing prices.

He found that low taxes had the most significant correlation with higher levels of net domestic migration.

“Across all specifications, tax burden is the most powerful and robust predictor of migration,” Salmon wrote. “States with lower taxes attract more people. That result holds even when controlling for housing permit issuance rates, climate, population density, and cost of living.

“The mechanisms behind this relationship are relatively straightforward,” Salmon continued. “Tax policy directly affects after-tax income. For mobile households, particularly higher earners and business owners, even modest differences in state tax burdens can translate into meaningful differences in take-home pay over time. This creates a persistent incentive to relocate toward lower-tax states, especially when those differences compound year after year.”

The brief showed that Oklahoma gained a net 73,277 people from domestic migration from 2018 to 2023, which was the 11th-largest net increase among the 50 states during that time. That was more than twice the number netted in neighboring Colorado, despite its scenic mountains, and more than all bordering states except Texas (which netted 722,485) and Arkansas (which netted 265,527).

Notably, both Texas and Arkansas have lower income tax rates than Oklahoma. Texas has no income tax, and the top rate in Arkansas was recently reduced to 3.7 percent. Oklahoma’s top income-tax rate is now 4.5 percent, although it is scheduled to decline by quarter-point increments in future years when revenue growth hits certain levels.

In addition to Texas and Arkansas, only Alabama (86,618), Florida (911,422), Georgia (214,620), Idaho (124,363), Nevada (104,200), North Carolina (347,378), South Carolina (289,111), and Tennessee (245,313) gained more net population from domestic migration than Oklahoma.

Florida, Nevada, and Tennessee have no income tax. Officials in North Carolina have just approved legislation that cuts that state’s income tax rate from 3.99 percent to 3.49 percent starting in 2027, with subsequent cuts scheduled to reduce the rate to 2.99 percent by 2033.

Of the 10 states that netted more population through relocation than Oklahoma, six have significantly lower income-tax rates.

On a per-capita basis, Oklahoma had a net migration rate of 18 people per 1,000 residents from 2018 to 2023.

On net, no-income-tax Florida gained the most movers of any state (+911,422), while high-tax California lost the most (−1,263,365).

While taxes were the major factor driving where people choose to relocate, Salmon noted that tax burden “is not the whole story.”

“The variable of housing permit rates, which affect housing supply, shows up consistently as well,” Salmon wrote. “In the strongest model, permits are not just positive, but statistically significant. Housing supply determines whether a state can accommodate new residents without sharply increasing costs. In states where construction is constrained by zoning rules, permitting delays, or regulatory barriers, increases in demand tend to show up as higher prices rather than more housing. This supply constraint limits in-migration and can push existing residents out. By contrast, states with more flexible housing supply can absorb population inflows more easily, keeping costs lower and enabling continued growth.”

Salmon noted that states with lower tax burdens also tend to adopt other policies that make those states more attractive places to relocate, noting that low-tax states “also tend to have more flexible housing supply, different labor market policies, lower costs of living, and predictable political alignments.”

In effect, the report suggests that broadly conservative governance attracts far more people than it repels.

“States with more favorable tax and regulatory environments are also more likely to permit new construction, suggesting these factors reinforce each other rather than operate in isolation,” Salmon wrote. “This combination both attracts new residents and sustains those inflows over time.”

The significant migration to Oklahoma and other top states from 2018 to 2023 demonstrates that government policies outweigh the impact of other, often unalterable factors, such as average temperatures or immediate access to mountains or beaches, the brief noted.

“The migration patterns from 2018 to 2023 are not primarily about sunshine or sticker prices,” Salmon stated. “They reflect something deeper: how states structure their economies. Lower-tax states with more flexible housing supply are gaining population, while higher-tax states with constrained supply are losing it. Everything else—climate, politics, even cost of living—is secondary.”