Florida’s tax burden continues on a downward path, and the state is being rewarded with population growth.
The Sunshine State boasts the second lowest tax burden–behind Alaska–and enjoyed the second largest spike in population growth–behind Texas–due to domestic migration, according to Key Policy Data. Low tax states, in general, enjoyed population growth and employment growth at much higher rates than their high tax peers.
“Not surprisingly, the lowest taxed states enjoyed population growth that was 205 percent higher, personal income growth that was 15.6 percent higher, and private employment growth that was 56.7 percent higher,” KPD research notes.
Florida is one of a handful of states that doesn’t have state individual income tax, and as such, the state commonly earns high marks for having a low tax burden. However, state official don’t appear to be resting on their laurels. Florida is one of only three states to reduce its tax burden since 1950.
Meanwhile, Americans are voting with their feet. U.S. Census records show that all but three of states with the 25-highest tax states lost population between 2007 and 2016, while all but five of the low tax states gained population for a total net migration 4.9 million people. Nearly five million people in the last decade moved from a high-tax state to a low-tax burden state, and 845,239 of them chose Florida.
According to a WalletHub study, Kansas ranks is among the top 10 for tax burdens. The median household in Kansas pays $6,924 annually in state and local taxes for an effective rate of more than 12 percent. The median Florida household pays $4,921 annually, for an effective rate of 8.8 percent.
As Kansas Policy Institute notes in its 2017 Green Book, every state provides the same basket of services, like education and highways, but some states provide those services at a better rate and pass the savings on to citizens in the form of lower taxes.
States with higher tax burdens also tend to land on the lists of states in the worst fiscal condition, Investors Business Daily notes.
“One way to look at all this is to conclude that poorly managed states are trying to force taxpayers to cover their mistakes,” the business publication writes in an editorial. “But, taxpayers won’t stand for it. Which strongly suggests that high-tax states need to set a new course toward lower taxes and less spending if they want to stop their population losses.”
Kansas lawmakers can take cues from Florida, where low taxes are helping fuel population growth, or take cues from states like New York. New York state has the second highest tax burden, according to KPD, and 1.3 million people migrated out of the state between 2007 and 2016.
No doubt, beaches help, but sunshine isn’t the only thing drawing people to Florida.