| October 30, 2013

Money walks

Anyone who has visited the How Money Walks website or has seen one of Travis Brown’s presentations in Oklahoma City or Tulsa knows that income is flowing out of our state. OCPA economists Scott Moody and Wendy Warcholik, co-creators of the Tax Foundation’s popular “State Business Tax Climate Index,” recently studied IRS data and found the same thing.

Overall, people are most inclined to move to Oklahoma from places where state and local taxes, union membership, population density, and the cost of housing are higher and temperatures are a bit colder. Or, more simply, people come to Oklahoma for lower taxes, fewer unions, more space, and more affordable housing. At the same time, Oklahomans are inclined to move to places where state and local taxes and union membership are lower and temperatures are warmer. …

From a policy perspective, it is especially telling that in-migrants are coming from higher-tax states and out-migrants are heading to states with lower taxes. This strongly suggests that not only are taxes an important driver of migration, but Oklahoma also could further improve its net in-migration by further reducing tax burdens, especially by reducing and eventually eliminating the personal income tax.

That’s very much worth considering, especially if Oklahoma doesn’t want to become an income-tax sandwich (Texas has no income tax, and Kansas is in the process of phasing out its income tax). I encourage you to read Moody and Warcholik’s entire article here.

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