Tax Foundation: Taxation Plays Direct, Indirect Role in 2021 Population Shift

U-Haul truck

As more Americans move to lower-taxed Republican-led states, a new report by the Tax Foundation indicates that taxation levels play a direct and indirect role as factors contributing to migration patterns.

Taxes often “play an indirect role by contributing to a broadly favorable economic environment. And sometimes, of course, they play little or no role,” Jared Walczak, a vice president at the Tax Foundation, writes in an analysis of 2021 U.S. Census Bureau data and inbound and outbound migration data published by U-Haul and United Van Lines.

“The Census data and these industry studies cannot tell us exactly why each person moved, but there is no denying a very strong correlation between low-tax, low-cost states and population growth,” he wrote. “With many states responding to robust revenues and heightened state competition by cutting taxes, moreover, these trends may only get larger.”

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United Van Lines: Americans Continue Moving Out of Higher-Tax States

While Americans continued to move out of higher taxed blue states in 2021, migration patterns were different than they were in 2020, a report by United Van Lines indicates.

United Van Lines customers primarily moved for new jobs or to be near family, resulting in their destination states being more varied than they were in 2020 when they primarily moved to western and southern states from northern states, its 45th Annual National Migration Study found.

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