Maryland a net loser as taxpayers migrate

Tax foundation migration mapThe Tax Foundation published a new map Monday showing the migration of income between states in the decade 2000-2010, with Maryland losing $5.5 billion in taxable income along with 66,000 residents.

The map has been making the rounds on Facebook, posted by conservative politicians and activists as further proof that Maryland taxes are driving people out of the state. The map is based on tax return data from the Internal Revenue Service, the same data Change Maryland used last year to show Maryland losing residents to states such as Virginia, a story picked up by national media.

On the map, the losing states are shown in purple and pink, and are generally higher tax states. The interactive map of the Tax Foundation website links back to the fuller data on which the map is based.

High tax states big losers

In general, high tax states such as New York, California and New Jersey are the big losers, while lower tax states are the big gainers: Florida, Arizona, Texas, North Carolina and Nevada (Florida, Texas and Nevada have no state income tax.)

Neil Bergsman, director of the tax-friendly Maryland Budget and Tax Policy Institute, said, “There’s no problem with the data. The problems is the Tax Foundation wants us to assume that all these people are moving out of Maryland because of tax policy,” while “they are moving mostly for other reasons,” warmer weather and lower housing costs being some of the main reasons.

The map doesn’t show a consistent picture. Low tax states such as Louisiana, Alaska, Mississippi and North Dakota are losers, and higher tax states such as Hawaii and Maine are gainers.

The biggest net migration into Maryland over that decade came from the District of Columbia, New York and New Jersey. The largest number of Marylanders leaving went to Florida, North Carolina, Pennsylvania, West Virginia and Virginia.

Bergsman speculates that many of those leaving Maryland are retirees, and concedes that some could be influenced by Maryland’s higher estate taxes.

–Len Lazarick