REPORT: More Americans Are Moving to These Low Tax States Than Ever Before
Americans are on the move – and although United Van Lines knows where they are headed, Forbes Magazine knows why.
Around 8 million people moved from one state to another last year and they did so for a variety of reasons: relocating as a result of a job transfer or to take a new job, to attend school or be closer to family.
But for many, there are other considerations that go into the decision to relocate – which state is the best place to start a new business or expand an existing one, or as is the case with retirees, which state allows them to make the most of their retirement savings.
For many, one of the biggest considerations is how heavily they are being taxed compared to the tax relief they can achieve if they move out of state.
Melissa Sullivan, Director of Marketing for United Van Lines, the largest moving company in the U.S., says, “For 40 years, United Van Lines has been tracking which states people are moving to and from. As the nation's largest household goods mover, the data we collect is reflective of national migration trends.”
And the winner of the most incoming moves in 2016 is… South Dakota.
Not surprisingly, people who have a choice to move are fleeing states that rank high on the Forbes Magazine list of the most heavily taxed states for those that let residents keep more of their paycheck or their Social Security check every month.
While some states do not have an income tax, others have a graduated system of assessing taxes and others have a simple flat tax, it is relatively easy to analyze the financial wisdom of making an out of state move.
New York is the most harshly taxed state in the union, according to Forbes with a rate of 12.6 percent, which has translated to the #3 spot on the United Van Lines list for departing moves.
New Jersey is right behind neighboring New York with a 12.3 percent tax rate, but it comes in first with more residents putting up For Sale signs and heading west or south.
Illinois rounds out the top three worst states for taxes and fourth on the out-going moves list.
United’s 40th Annual Movers Study reveals that people from all states are choosing to relocate west of the Mississippi or south of the Mason-Dixon Line, while states in the “Rust Belt,” like Pennsylvania and West Virginia are seeing more moving vans headed out.