Texas, Florida, and North Carolina attracted the most Americans under 35 from other states, while California, New York, and Illinois saw the biggest losses, according to a new NTUF report analyzing IRS data released Thursday.
Adjusting for population sizes shows that Montana, South Carolina, and Tennessee are also popular youth destinations, while Hawaii, Louisiana, and Massachusetts struggle to retain youth.
“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. Smart tax policy that encourages and enables economic dynamism and does not drive away newer industries with short-sighted and heavy-handed tax enforcement might not attract young people on their own, but the impact it has on the economy certainly will,” said Andrew Wilford, Director of NTUF’s Interstate Commerce Initiative and author of the report.
While states want to encourage taxpayers of all ages to move from other states, they especially want to attract young people, because social services are funded by revenue from younger, working-age taxpayers, according to the report.
The latest IRS data on Americans’ 2021 interstate moves challenges the idea that fast-growing states are simply filling up with retirees. While Florida is often seen as a haven for older Americans, it actually gained nearly 10,000 more residents under age 35 than it did retirees.
Meanwhile, high-tax states thought of as trendy destinations for young people, like New York and California, are in fact experiencing some of the most significant and persistent outflows of youth to other states.