Migration

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Migration

Texas, here we come

NEW YORK

IN THE ten years I’ve lived in New York I forgot how to drive. Lately I’ve been spending lots of time in Austin, Texas. Enough so that I’ve had to start driving again. When you go many years without driving, it becomes terrifying. So to refresh my skills I took lessons with a wonderfully patient and brave woman who has taught driving in Austin for nearly thirty years. I expected to be one of her few adult students, but no. My instructor claimed in the past few years the number of adult students increased exponentially, not quite rivalling the number of teenagers. Most are tech workers who come from all over the world, drawn by the vigorous labour market. Adult driving students struck me as a rather interesting economic indicator.

It doesn't tell us anything we didn't already know. Migration statistics reveal that people are moving in droves to Texas. Why? Jobs and no state income taxes. High earning New Yorkers and Californians can take home between 9% and 11% more of their income by moving to Texas. Every trip down I speak to at least one bitter New Yorker/Californian fed up with high taxes and cost of living. Forbes recently posted a fun map of domestic migration by county. Travis County, where Austin is, experienced nearly all inflows (the black lines):

Compare that to Santa Clara County where Silicon Valley is located, the red lines (outflows) signify a beeline to low or no tax states:

It does not bode well for high tax states with nasty fiscal problems (talking to you California and New York). There is only so much you can tax your way out of.