VT is Lucky to Have High-Tax Neighbors, But Still Loses Migrants (September, 2019)

September 20, 2019

By David Flemming

Vermont lost more than twice as many people to distant, less taxed states than it gained from mostly neighboring states that were taxed about the same as Vermont. That’s what the migration data from the Internal Revenue Service’s Statistics of Income (IRS SOI) and tax burden data from Wallethub tells us.

Between 2010 and 2016 Vermont lost nearly 7000 people on net to 41 states. 1 in 4 of these Vermonters moved to Florida, home of the 0% income tax and balmy beaches.

What makes this interesting is that the comparing these side by side with the “state and local tax burden.” While we already know that Vermont has one of the highest property tax rates in the country, the tax burden metric gives us a better idea of how much in taxes we are actually paying, since tax deductions can skew the numbers.

Competing with the rest of the country outside of New England is a different story. We lost 3960 people to Florida, North Carolina, Colorado, California and South Carolina who all have lower tax burdens, ranging from 2.7% in Florida to 6.3% In California(!).

That said, we did gain nearly 3000 people from the remaining 8 states. Thankfully for us, legislators in our neighboring states are even more zealous about high taxes. We gained 1155 migrants from New York, which places a 9.4% combined tax burden on property and income, a full 2 percentage points higher than Vermont’s 7.4%. That said, Vermont still has the highest combined income and property tax burden in New England: 7.4%.

Aside from New Hampshire (5.6% tax burden, to whom we lost 264 people to), most New England states have a similar income and property tax burden. That goes from 7.1% (R. Island) to Vermont’s 7.4%. We gained 328 people on net from New England as a whole. Overall, it appears that when you are already being taxed exorbitantly, you may as well live in a beautiful state. Vermont has the “taxed exorbitantly” and “beautiful” bases nicely covered, but those taxes still hurt us overall.

David Flemming is a policy analyst at the Ethan Allen Institute.

{ 2 comments… read them below or add one }

Meg Hansen September 20, 2019 at 4:55 pm

David, this articles provides excellent instructive analysis. Thank you!

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Meg Hansen September 20, 2019 at 4:56 pm

David, this article provides excellent instructive analysis. Thank you!

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