A new report released Wednesday by the National Taxpayers Union Foundation (NTUF) challenges the long-held belief about which states are preferred destinations for young Americans. Analyzing recent IRS data, the report reveals that Texas, Florida, and North Carolina are attracting the most Americans under 35 from other states, while California, New York, and Illinois are experiencing the most significant losses.
The findings, detailed in an NTUF report authored by Andrew Wilford, Director of NTUF’s Interstate Commerce Initiative, suggest that factors beyond traditional perceptions are driving the migration patterns of young people.
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“While the impact of tax policy may be less directly obvious to young people than older, wealthier Americans, even young people go where jobs are available and housing is affordable,” said Wilford. “Smart tax policy that encourages and enables economic dynamism and does not drive away newer industries… might not attract young people on their own, but the impact it has on the economy certainly will.”
The report highlights that states are particularly keen to attract young people, as their tax contributions are crucial for funding social services. This new data disproves the popular notion that fast-growing states are solely filling up with retirees. Florida, often stereotyped as a haven for older Americans, surprisingly gained nearly 10,000 more residents under 35 than it did retirees.
Conversely, states often considered trendy destinations for young people, such as New York and California, are experiencing substantial and consistent outflows of youth. These states, along with Illinois, saw the biggest net losses of residents under 35.
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When adjusting for population size, the report indicates that Montana, South Carolina, and Tennessee are also popular youth destinations. In contrast, Hawaii, Louisiana, and Massachusetts are struggling to retain their younger populations.
The study also delves into some intriguing anomalies. While Texas’s net gain from domestic taxpayer movements is overwhelmingly attributable to individuals under 55 (nearly 90%), Florida’s figure stands at just over 60% for the same age group. The report notes that most states gaining young people also see gains in other age groups, with the exceptions of Colorado, Washington, Oregon, and the District of Columbia, which surprisingly lose residents in other age brackets.
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The authors suggest that while direct tax implications might be less apparent to younger individuals, the broader economic environment shaped by tax policies plays a significant role. High-tax states often experience diminishing economic opportunities and soaring costs of living, factors that are highly sensitive to young people.
In conclusion, the NTUF report emphasizes that the interstate migration trends of younger Americans are more complex than commonly perceived. While direct tax incentives may not be the primary driver, the report underscores the critical role of sound tax policy in fostering economic dynamism, creating job opportunities, and ensuring affordable housing, all of which are powerful magnets for the nation’s youth.
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