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How Money Walks: States That Do This are Wealthier

09-08-2014
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There's a growing body of research that shows that taxes are driving migration between the states. The winners are states with low taxes and the losers are states with high taxes.

Tennessee is one of the winners. It's a beautiful state with a mild climate, and it has no personal income tax and an overall low tax burden. 

It's an easy sell for Mary Jo Paige, who heads marketing for the retirement community Fairfield Glade.

"A lot of people are coming from the Midwest -- Wisconsin, Illinois, Michigan, Ohio -- and a lot of people are coming from the Northeast because that's a very expensive place to live," she said.

Researcher Travis Brown took a look at IRS data that tracks adjusted gross income and found that people are also flocking to the eight other states with no personal income tax and generally low taxes.

"Generally what we find is that taxpayers over the long term are fleeing the high tax states and flocking to the low tax states," said Brown, author of How Money Walks.

But critics contend that low taxes play at most a minor role when it comes to migration between the states. They point to research that shows that people move for climate, new jobs and cheaper housing.

It's all part of a growing debate over the best way to tax and what factors lead to prosperity.

It's also why An Inquiry into the Nature and Causes of the Wealth of States has become a New York Times bestseller and potential game changer for public policy.

"In researching our book, we discovered that the two most important policy variables influencing the prosperity of particular states are whether a state has a right-to-work law and its income tax rate (the lower the better)," Stephen Moore, one of the book's co-authors, writes in a recent op-ed.

"These two factors help explain the flow of jobs and people from the Midwest and Northeast to the South and Southeast," he said.

Stephen Moore will talk more about his best-selling book and what drives migration between states, on The 700 Club, August 14. Check your local listings or check CBNNews.com after 11 am EST for that interview.

CBN News' Efrem Graham spoke more with Moore about what the research shows. Click play to watch below.

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