Domestic migration: an increasingly common phenomenon in the US

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Domestic migration in the US is a normal phenomenon, but more and more people move from one state to another in search of better income for their businesses

Domestic migration: an increasingly common phenomenon in the US

The immigration of thousands of people to the United States is currently the subject of debate in the country. In the presidency of Donald Trump the debate is increasingly critical because of the political and social repercussions that the issue acquires for the inhabitants of this country. However, there is another type of flow of people within the US that begins to impact the economy and the demography of the country.

Leer en español: Migración interna: un fenómeno cada vez más común en EE.UU.

As most people know, the US is a federated country, which means that its internal division is constituted by other smaller states with autonomy and sovereignty determined by the central State. Therefore, within the same country, norms, regulations and taxes may differ between States, making some more attractive than others for business according to each person's need.

Let's say there is a farmer in California and he learns that in Utah there are less taxes on products and tools that come or are used in crops. The most rational decision for this person would be to move to Utah, where the development of their economy would be more profitable.

This situation can be applied to different contexts: quality of life, employment, the ease of starting a business and other variables that can be decisive when choosing a place of residence.

A unique phenomenon among developed countries

This situation is becoming more and more frequent for Americans. According to data from the Internal Revenue Service (IRS), the domestic tax service of this country (possibly the agency with the best data), in 2016, 2.8% of all taxpayers moved. This is a very high rate of internal mobility when compared with data from other developed countries.

Below is a graphic of the US Census Bureau showing which were the states with the largest flow of people from 2011 to 2017:

You can also read: What can you buy with the minimum wage in Latin America?

Between the two poles of this situation are New York, the State with the greatest number of people fleeing to another states; and Florida, the state where more people arrived. According to data from the Census Bureau, in Florida about 1,025 million residents from other states have been established since 2010.

On the other hand, New York has suffered the largest number of net domestic migrants, estimated to be around 1,020,000 in this period of time. These numbers seem to be increasing since in the last two years the figure begins to increase, going to have 190,000, well above the 80,000 initial domestic migrants that were calculated in 2011.

Taxes: the main reason to change to another State

In practical terms, what does that mean? Well, each time a State loses a significant number of inhabitants it loses a large portion of wealth. An example of this are the more than 1.025 million people who left New York, who will have their income in other States.

This money can be put at the service of its financial entities and businesses, and that will serve for the creation or displacement of new companies, strengthening the economy and helping to create more jobs and the collection of more financial resources that could have been put to New York service.

What are the causes? Although there are several reasons for a person to decide to move to another State, there is a causal that seems to be the most important: taxes. According to the IRS, in 2016 almost 600,000 people moved from the 25 states with higher taxes to the 25 states with lower taxes.

Taking into account the above, and adding the Fiscal Reform that the Republican Party promoted in 2017, competition among the States of the United States seems to be a concern for the country.

It is a fact that states with fewer regulations and taxes are attracting millionaires from all over the country. Example of this is Florida, State where there is no State income tax and property taxes are much lower compared to other States.

This only seems to indicate the beginning of a war for control and good management of State resources, seeking to be the most attractive for investment and wealth.

LatinAmerican Post | Juan Sebastián Salguero

Translated from "Migración interna: un fenómeno cada vez más común en EE.UU."

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