Domestic Migration Trends & Census Statistics: Jonathan Williams on American Radio Journal

In our grand American experiment of federalism: the 50 states continue to function as our laboratories of democracy, each pursuing different policy paths that affect the economic landscape. Elected officials make critical decisions about tax structures, regulations, and business climates, all of which directly impact where people and businesses choose to live and operate. Americans continue to vote with their feet, migrating to states that offer favorable conditions while leaving those with less attractive policies behind. Just before Christmas, the U.S. Census Bureau released its new estimates on net domestic migration, and this data illustrates how the decisions made by American businesses and taxpayers play out.

Texas led the nation with the highest net in-migration over the last 12 months, gaining over 85,000 new residents. It was followed by North Carolina, South Carolina, Florida, and Tennessee, which together saw nearly 350,000 new residents. These states share common attributes: low taxes, fewer burdensome regulations, and policies that foster economic opportunity. They attract individuals and businesses seeking environments where economic freedom—and thus economic opportunity—thrives. In stark contrast, states like California continued to lose residents for the fourth consecutive year. Unsurprisingly, California had the largest net outflow, with nearly a quarter of a million people leaving over the past 12 months alone. Over the past five years, the state has lost more than 1.4 million residents on net. This loss represents not only a shift in population but also a profound economic loss for the state. Taxpayers, businesses, and jobs leaving the state compound the fiscal difficulties it already faces in 2024. This contributed to a $47 billion budget deficit, forcing policymakers to deplete the rainy-day fund.

California’s struggles are not unique. Other high-tax states like New York, Illinois, New Jersey, and Massachusetts are also experiencing significant out-migration. Combined, these states lost nearly 500,000 residents on net in the new report. The common thread in these states is an overreliance on high taxes, especially on income, excessive regulations, and overall policies that discourage business growth. The irony is that these states promise fairness and security, but they often end up fostering conditions that drive away the very people they hope to serve.

For the past 17 years, my colleagues Dr. Arthur Laffer, Stephen Moore, and I have compiled the “Rich States, Poor States” report ranking states based on key economic policies. We’ve identified 15 policy variables such as income taxes, property taxes, and spending and regulatory policies that influence migration patterns across states. Our findings are clear: states with economically competitive policies attract the most people. In 2024, the top 15 states in our rankings all saw net domestic in-migration, showing that sound economic policies can drive success.

West Virginia provides a striking example of how policy reform can reverse a state’s fortunes. Once known for economic decline and out-migration, West Virginia has seen a remarkable turnaround in the past few years. Back in 2008, the state ranked 38th in our economic outlook score in “Rich States, Poor States,” but by last year, it improved all the way up to 23rd and, more importantly, had experienced four consecutive years of net in-migration after decades of consistent out-migration. This success is largely due to policy changes that created a much more competitive environment, including right-to-work legislation, a reduction in personal income tax rates, and a strong emphasis on education freedom.

West Virginia’s turnaround has inspired other states, with 12 adopting similar education freedoms and 25 reducing personal income taxes since 2021. The success of West Virginia and other states demonstrates that both economic and educational freedom are powerful drivers of growth, especially when a state pursues both. Four of the 10 states attracting the most people this year have no personal income tax whatsoever, and another four have flat personal income taxes. A score more have education freedom.

The lesson for policymakers is clear: the policies you choose have a significant impact on whether your state attracts or loses residents. States that embrace low taxes, minimize burdensome regulation, and foster individual freedom create better environments where people and businesses thrive. In contrast, states that burden their residents with high taxes and stifling regulations will continue to see their citizens leave for more competitive states. As we look ahead to 2025, it’s evident that the future belongs to states that prioritize economic and educational freedom. These states will attract growth, create opportunity, and foster the conditions necessary for long-term prosperity. The key to success lies in understanding that sound policies truly drive economic progress for hardworking taxpayers in states all across America.