Interstate Policy Competition

Don't care about pollution
I'm an air-conditioned gypsy
That's my solution
Watch the police and the tax man miss me
I'm mobile!
--The Who

One of the many beneficial features of the federalist system created by our founding ancestors is that it promotes policy competition among the states. If, for example, a particular state places high tax burdens on its citizens, then people can 'vote with their feet' by leaving the state in favor of lower tax regimes.

Data presented by Dan Mitchell suggest people are doing just that. Individuals are moving from states with oppressive policies such as California, New York, Illinois, and New Jersey to states like Florida, North Carolina, Utah, and Texas that offer more liberty.

One recent study of state household taxes (income, sales, property taxes) and domestic migration rates finds a significant negative relationship, i.e., the higher the state household taxes, the lower the level of migration into that state, as expected.

Mitchell does note one potentially undesirable consequence of these domestic migration patterns. Migrants coming from oppressive policy states might bring their political attitudes with them, which subsequently might lead them to support the same policies that ruined the states that they left. Recent political developments in Colorado, which has been a destination state for many fleeing high tax  regimes, is offered as an example.

An interesting point, but a design that supports ongoing interstate policy competition is likely to erode political attitudes that lead to oppressive policies over time.