The US Center on Budget and Policy Priorities has put together a report indicating that people relocating within the US do not generally regard State taxation as an important driver in their decision. This is the case even though there can be significant differences between taxes charged in different States in the US.
Every year around three percent of individuals in the US relocate to other States, and IRS statistics indicate that tens of thousands of these individuals are actually moving to States that have higher taxes than their State of origin. This is often the case even though one of their neighboring States may impose lower taxes than the State of origin.
The most important factors leading to migration, according to the report, include employment opportunities and more affordable housing. In the case of people entering retirement the main consideration may be the climate. Although there are some people who migrate because their State tax bill is too high they are not numerous and this is not a reason for States to change their tax policy.
