Fascinating interactive maps at How Money Walks shows where the tax flows int he United States are — both nationally from State to State and Intra-State from County to County.

 

Click for interactive experience
GraphicSource: How Money Walks

 

 

Since I am on the Left Coast, let’s use California as a sample:

California
Graphic
~~~

Here is how cash migrated to and from other states:
Graphic

 

You can see any inflow or outflow of any state, as well as the intra-state movement.

 

New York after the jump

 

New York State
Graphic

~~~
Graphic

Source: How Money Walks

Category: Digital Media, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “How Money Walks”

  1. VennData says:

    The “Red-State” model. ROFL!

    No wonder they talk about Bengazi all day. If they talked about this it would go against their “philosophy!”

    Can you drive the GOP clown car through all the Red-States that take more than they give and have.. ahemm, low tax rates?

    • Mike Radigan says:

      You mean it would go FOR not against, that was the conclusion of the article.

      And Bengazi is a whole separate issue. I don’t care what side of the aisle you are on, you should want the truth. Innocent Americans were murdered. My God, how you not want this investigated to its fullest?

    • LiberTea says:

      Definitely a new connotation for ‘red state’

  2. lalaland says:

    I find this stuff fascinating. I’m very curious how things like retirees moving from NY to Florida really shakes out. For example, old-timers have been getting huge resale prices on houses they bought decades ago, but when they sell their home in Brooklyn for 800k, Brooklyn gets a new owner with a much higher income, most likely at peak consumerism (growing families), and mid-point on their earnings trajectory. Brooklyn gets someone at their creative peak. Florida gets maybe 400k of that sale, but most of the extra cash will go into the stock/bond market. The retirees will dedicate most of their money to health care and daily sustenance, and their earnings will almost certainly decline, rather than rise, over the rest of their lives. Is that a net gain for Florida or Brooklyn, when all that wealth moves to (especially a no-income tax state like) Florida?

    On the flip side you can see a place like Brooklyn is pricing out families – the money is moving out to the suburbs of Long Island and NJ especially. It’s also fascinating to see how colleges and money/politics centers like Boston and DC are fueling growth in Brooklyn, even if they are dwarfed by Manhattan inflows.

    Gained Wealth From:
    $1.83 billion New York County, NY – inflows from Manhattan
    $21.45 million Suffolk County, MA – the Hamptons
    $17.15 million Middlesex County, MA – boston
    $16.96 million District Of Columbia, DC – DC
    $12.61 million Allegheny County, PA – Pittsburgh, which has a growing Med-Tech college hub

    Lost Wealth To:
    $1.69 billion Queens County, NY – more affordable/quality of life for families
    $1.13 billion Nassau County, NY – “” “”
    $557.92 million Monmouth County, NJ – “” “”
    $513.55 million Middlesex County, NJ – “” “”
    $483.19 million Suffolk County, NY – “” “”

  3. Frwip says:

    Per capita would be more fun … and even more deflating for those true, self-reliant Americans in the middle.

  4. CSF says:

    Laffer concludes that people leave high-tax states for low-tax ones. While there may be some truth to this, the data within states suggests other explanations. People tend to leave cities, rust-belt regions, and the cold. They head towards the suburbs, regions with jobs, and warmth. Is this surprising?

    • ottnott says:

      Yep. The intrastate flows are as dramatic as the interstate flows, yet he (Travis Brown is the author, Laffer provided the Foreword) concludes that interstate flows are all about the tax rates.

      The maps are nice, but the book likely is tripe.

      Consider this from the publisher’s description of the e-book:
      “Money—and people—moved from high-tax states to low-tax ones. And the tax that seemed to matter the most? The personal income tax. The states with no income taxes gained the greatest wealth, while the states with the highest income taxes lost the most. Why does this matter? Because the robust presence of working wealth is the leading indicator of economic health. The states that gained working wealth are growing and thriving.”

      Now look at Bill McBride’s latest chart on unemployment rate by state (March 2013 data) and see where income-tax-free Nevada and its Money Walking wealth rank:
      http://4.bp.blogspot.com/-RJTmor3_obM/UXFZeNrnztI/AAAAAAAAZ4g/0WAs1qilTxA/s1600/StateUnemployMar2013.jpg

  5. mcknz says:

    Makes me wonder if anyone has ever explored the possibility of the weather as a cause for this.

    *ahem*

    http://www.ritholtz.com/blog/2013/03/say-it-with-me-correlation-%E2%89%A0-causation/

  6. Moe says:

    Thanks for posting this!!!

  7. gordo365 says:

    I live in Cali – and was in Las Vegas recently. Listening to news – there is a new initiative to reduce Nevada elementary class sizes down to 30. Yes – they are trying to limit class sizes to 30.

    here is california – we pay income taxes and have limit on kindergarten at 18. Most elementary classes in low 20s.

    Pretty cool huh?

  8. Thomas says:

    It might be good to also look at the poverty rates by state: http://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate

    For example, in Texas, the combination of no personal income taxes, high sales taxes and a limited welfare state doesn’t seem to be helping the poor much.

  9. perpetual_neophyte says:

    VennData – I think you misinterpreted the data. The states in red on the map are claimed by the map’s author to be losing personal income (measured by AGI and population) to the states in green. That is, California LOST about $32 billion in annual AGI from 1995 – 2010.

    mcknz – That may be a reasonable corrollary, but doesn’t explain California’s situation or several of the “gainers.” For example, Illinois vs Colorado. New Jersey vs Washington State.

    I am sure there are a lot of reasons involved – almost nothing like this can be boiled down to a single variable – but to ignore taxation seems silly. Even if they are not actually physically moving residences… Someone in California might figure out, for the amount of money they pay per year in state income tax, they could take out a mortgage on a condo in Nevada and “live there for just over half the year.”

    • mcknz says:

      agreed — I don’t really think weather explains things completely. The BR piece I linked to was fairly tongue-in-cheek.

      I’m sure taxation influences migration to some degree, but this doesn’t mean the elimination of personal income tax (as recommended by “How Money Walks”) is ideal public policy. If the state’s share of that migrated income is 0%, does it really matter where the wealth is? Of course that income theoretically brings indirect benefits to a given state aside from tax revenue.

  10. tgdc says:

    The most likely explanation for this data is “osmosis”. That is to say, to consistently be a state that has a lot of wealth migration out of it you have to be a state where lots of wealth is created. Put a drop of food coloring right on top of a glass a water and leave it overnight. By the morning the dye will be spread throughout the glass. Was that net movement because the bottom of the glass had lower tax rates? No, the net migration occurred because when molecules move around the dy will move on average from area of higher concentration to areas of lower concentration. So NYC, LA, and SF have wealth migrations out. Well, yes, because that is where wealth is actually created in this country! South Carolina, not so much…. but it is warm down there.

  11. TrainStation says:

    It appears retirement destination states receive the most money (retirement outlays?).

    So you pay your taxes in Manhattan and receive your benefits in Florida.

    • TrainStation says:

      If retirement benefits skew the numbers, a good example is the state of Delaware. The northern portion of the state (Wilmington, Dover, Newark- where most people work) has negative money flow; the southern portion of the state (Rehoboth Beach, Bethany Beach- where people retire to) has positive money flow.

  12. Livermore Shimervore says:

    So red states that didn’t hit the oil in the ground/sand lottery are actually more socialist than the liberal states? But continue to elect ‘conservative’ members of Congress who head to D.C. to ask for more socialism?

    How about this, we get the House Republicans to introduce a bill: states that received a net benefit in federal spending over federal taxes paid must withold any requests for appropriations until their tax revenue at least puts them into break even territory. Or in the altnernative, their members of Congress are barred from making any references to Obama socialism, Obama liberals, the 47% or the Obama deficit each year that they are designated as a ‘net beneficiary’ state. And while we’re at it let’s remove defense spending appropriations from federal spending received for all states to see exactly how much of our taxes is going to fund their basic state operations.

  13. SteveRJohnson says:

    Without any readily available explanation of methodology that I could find, it is difficult to deduce anything from this, and I find that in some cases it is at best anecdotally counterintuitive (or just plain wrong), to wit: according to the census, Maryland, the state with which I am most familiar, from 1995-2010 gained nearly 750,000 people (+15%, while the interactive map shows a loss of 27,000- hmmm…) and became the wealthiest state in the nation by hh income, yet somehow is shown to have lost $6 billion in AGI. Would love any explanation about methodology, or at least the vast difference in population numbers, but searching seems to run into a wall of “buy the book…”

  14. LiberTea says:

    AGI is a measure of INCOME, not wealth

  15. kaleberg says:

    It isn’t clear whether they are talking about the movement of money or the movement of people and ownership. I assume the former. After all, we’ve all known for years that wealth is produced in urban areas and redistributed by the government to suburban and rural areas, generally from blue areas to red areas. You’d expect that to drive migration to some extent, and this is often the stated purpose of the transfers. (Rural electrification, for example, was aimed at encouraging people to stay in rural areas.)

    If you look at the marketplace, we also know that people like to pay higher taxes. Real estate is more expensive in high tax areas, a sure market sign. Any economist would tell you that if people wanted lower taxes, they’d simply move and the lower demand in the high tax areas would lower house prices. In the mid-2000s, the rule of thumb is that people would pay an extra $10,000 for a house in an area which took 1% more of their income for taxes. Real estate agents usually use the code phrase “good schools” rather than coming right out and saying what they mean.

  16. Chad says:

    I assume this is people moving? Though, I would be highly surprised if Allegheny County (Pittsburgh) was a main people feeder for Brooklyn.

    I’m not sure this tells us much on a national scale. Old cold densely populated rich states have people moving to warmer states with newer cities/construction. Even that is a shaky conclusion. Are the movers young or old? Moving for a job or retirement? Etc.

    I must admit I don’t understand the focus on moving to a “warm” state. All you do is switch the time of year you spend in doors. In NY you stay inside in the winter. In Florida you stay inside in the summer.

  17. Bob Lince says:

    Looks like money travels from more productive areas to less productive areas. Such surprise!

    Next, they’ll be telling us that children get more allowance from their parents than the parents get from their children.

  18. Greg0658 says:

    didn’t see my therory .. earn in high wealth creation areas and move to lower wealth creation areas where your captured cash stretches further

    the temperature concept I buy too – snow is harder on old folks .. and the comments on said temp trade’g – in HVAC – warmer climates need ventilation to mild heat in winter and full out aircond in summer – but no snow shovel’g

    my 1st statement – if foreign lands had more corruption stability we may see more exit’g to cheaper to live offshores .. does social security take a hit (taxed) if sent offshore to spend? this guy would say – should.

  19. Biffah Bacon says:

    Golly what a bad piece of science. One hundred monkeys with ArcGIS fiddling around with public datasets and looking for something to sell to a moneyed interest with an axe to grind.
    Anchorage, Alaska for example charges no sales tax and there is no state income or sales tax. Property owners pay substantial taxes (for Alaska; peanuts compared to Washington, Oregon, California). The state gives each permanent resident and military member willing to sign a paper a portion of our collective oil revenue as invested in the markets by two competing firms; last year about 900 bucks.
    Yet Anchorage is molten lava red and MatSu (Palin palookaville and the meth manufacturing capital of the state) is green! Anchorage is where all the oil company headquarters are, all the oilfield and logistics providers, rail yards and sea port and airport and business hub.
    MatSu is farms and bedroom community developments and some third world rural poverty pockets. It produces subsidized ag products and gravel. That’s winning? That is what gives Art Laffer a gigglewood? Decontextualized data like this presented as the smoking gun for someone’s pet theory is just nakedly sad.