Today, we are excited to announce the launch of our Center for State Competitiveness, a new project aimed at helping states to position themselves for growth and prosperity through their tax codes.
Our Tax Competition in the States update will be a weekly update on the tax and fiscal policy trends we’re tracking at the state level: which states are making themselves more competitive, which states are making themselves less so, and what issues are bubbling up in multiple states.
Texas Overtakes Florida in Attracting Most Taxpayers Per Minute
We recently released an updated version of our Migration in Minutes report based on the latest IRS data. Texas and Florida gain a new resident about every four and a half minutes, while California loses one every two and a half minutes.
But, while Texas edged out Florida to be the fastest-growing state in this latest round of IRS data, Florida continued to be the hottest destination for higher-income taxpayers. The loss of high-tax states like California and New York remained other states’ gain.
Check out the rest of the report, including breakdowns of interstate migration trends among young people and revenue impacts here.
And Then There Were Eight (in 2029)
Washington Governor Bob Ferguson recently signed S.B. 6346, legislation that will establish a 9.9% tax on individual income above $1 million beginning in 2029.
While currently Washington is one of nine states with no individual income tax, this action will mean that Washington will become the first state to self-inflict such a competitive disadvantage since Connecticut in 1991.
And while we’re on the topic of migration, just look at how the state’s recent shift to tax increases has affected its attractiveness to taxpayers:
Meanwhile, the rest of the country is headed in the other direction. Missouri HJR 173 would ask voters to approve a plan to use triggers to eventually eliminate the income tax, replacing some of the lost revenue by expanding sales tax to services. The bill has passed the House and is currently being considered by the Senate before heading to Gov. Mike Kehoe, who has led the effort.
Additionally, Mississippi, Kentucky, and Oklahoma have all enacted a statutory path to zero income tax (contingent upon meeting trigger thresholds).