Get State Taxes Have A Minimal Impact On People's Interstate ...

For the year of your move, you'll file a part-year resident tax return in each state, but don't worry – you won't have to pay double the state tax. Each state taxes the income that was earned in that particular state, but most states don't tax the income earned in the other state.

The lower one's income, the higher one's overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate nearly 60 percent higher than the top 1 percent of households.

A careful look at Census and IRS data on interstate migration, and a review of academic studies, find that: Relatively few Americans relocate from state to state, and a miniscule share of them report that they moved because of taxes.

Research on California taxpayers has shown that some top earners do leave the state in response to large tax increases, but studies vary in their estimation of how many people leave.

Interstate moves are decreasing, despite increasingly disparate state tax systems. Only a small percentage of people move to another state in a given year, and that percentage has steadily decreased in recent decades, even while tax differences between states have increased.

States with no income tax often make up the lost revenue with other taxes or reduced services. A state's total tax burden, which measures the percent of income paid in state and local taxes, could be a more accurate measure of its affordability than its income tax rate alone.

The evidence available to date suggests that recent net outmigration from California has reduced, but not reversed, the rate of growth in California income tax revenues. After more than a century of rapid growth, California's population has changed little in the last few years.

The states with the lowest tax burden are: New Hampshire – 6.14% Tennessee – 6.22% Florida – 6.33% Wyoming – 6.42% South Dakota – 6.69% Montana – 6.93% Missouri – 7.11% Oklahoma – 7.12%