Data Complicates Governor’s Narrative Around the Role Taxes Play in Where People Move

While data on the number of people who move to and from Virginia has been used to push tax proposals that overwhelmingly benefit the wealthy, there is little evidence that state income taxes heavily influence people’s relocation decisions, according to a new report from The Commonwealth Institute (TCI).

The new report shows that people move between Virginia and states with both higher and lower top income tax rates. It also shows that Virginia is a top destination for people to move to from 20 other states, with both higher and lower income taxes. But migration data, often cited by Gov. Youngkin and other lawmakers, does not explain why people move.

The research that is available suggests that people leave their states for employment opportunities, to be closer to family, to find more affordable housing, and for better lifestyle fits. Taxes rarely make the top of the list. Other bodies of research show that even millionaires are not strongly influenced by tax policy when it comes to where they live.

“Rather than push harmful proposals based on speculation about who might leave or who we might attract to Virginia, state lawmakers should invest in strong public education, safe and affordable housing, accessible health care, and safe transportation, which arguably make a state a more desirable place to live,” says Megan Davis, Senior Policy Analyst at The Commonwealth Institute and author of the report.

TCI encourages lawmakers to avoid similar tax cut proposals in the future, particularly in light of the significant impact that recent federal decisions will have on the state budget and the historic cuts to food and health care access.

“There is no way we can fully fix the harm of Congress’s recent legislation, but state lawmakers can make bold choices that will help more families across Virginia thrive,” says Davis. “The data shows that choosing to modernize and close loopholes in our tax code will not push people away from the commonwealth. Instead, we will be able to raise the resources to invest in our communities and make Virginia a great place to live for people who call it home now and will choose to call it home in the future.”