Top States for Domestic Migration and Economic Competitiveness: Jonathan Williams on American Radio Journal

As we reflect upon our 250th year as a nation, migration of the American people has been one of the defining stories. The Pilgrims crossed the Atlantic in search of freedom to practice their faith. The frontier of the original colonies pushed west into the fertile land of the Ohio River Valley. Americans set up homesteads across the Great Plains and chased new opportunities in the far West with things like the Gold Rush.

Today, the 50 states continue to showcase substantial domestic migration as Americans vote with their feet across state lines. The 50 laboratories of democracy, when you think about it, represent an incredible economic experiment. Each state makes its own set of choices on key policies like taxes, regulations, education, and energy. Some of those choices, of course, help their economies grow. They create jobs, allow wages and businesses to grow, and increase prosperity. Other policies burden businesses and workers, leading companies to close up shop and making it harder for families to make ends meet.

Just last week, the U.S. Census Bureau published the latest data on these migration patterns, and they show that states embracing free markets and limited government are, many times, the biggest magnets for in-migration. As Americans vote with their feet, they make clear which states make the American dream possible and which others are forcing residents to leave in search of that dream elsewhere.

North Carolina is the big winner this year. On net, nearly 85,000 individuals moved into the state from one of the other 49 states. This should not be a surprise for astute observers of state policy. North Carolina’s lawmakers have undertaken a multi-year effort to create a flat tax for individuals, reduce income tax rates, and eventually eliminate the corporate income tax altogether this decade. This is the first time in decades that another state has attracted more domestic migration in a year than Texas or Florida.

However, this success for North Carolina did not happen overnight. It is the culmination of a years-long turnaround. Today, North Carolina’s economic outlook in Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index is fourth best in America, up from a low of 26th in 2011, before its historic free-market policy reforms.

North Carolina’s impressive showing in this migration data suggests that Americans have taken note of this incredible economic turnaround. Among the other states Americans are moving to in this latest data, embracing lower taxes and limited government is a common attribute. The top five is rounded out by Texas, South Carolina, Tennessee, and Arizona. Combined with North Carolina, nearly 300,000 Americans moved into these states from July 2024 to July 2025.

For the fifth year in a row, California lost more residents to domestic migration than any other state, which is not surprising to many. On net, 229,000 Californians left the state over this period. In total, since 2016, the state has lost nearly 2.3 million residents to one of the other 49 states. That is more than the entire population of New Mexico.

It is sometimes suggested that it is not public policy, but immutable characteristics like weather and geography, that determine how Americans migrate. But that argument is contradicted by California, which, with its picture-perfect weather and attractive scenery, is seeing net losses of hundreds of thousands of residents to the rest of the country every year.

Income taxes seem to be particularly important to the Americans who vote with their feet. Of the 10 states gaining the most residents, four have no personal income taxes at all, and four have flat taxes, with only two having progressive income taxes. On the other side, seven of the 10 states losing the most Americans have progressive income taxes, many with exorbitant rates. California is joined by New York, Illinois, New Jersey, and Massachusetts as the states losing residents the fastest this year. These five high-tax states lost nearly 480,000 residents last year.

The lesson for policymakers here 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 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 it has been throughout our 250 years of history, Americans are still migrating to enhance opportunity for themselves and their posterity.