Feature

Why is everyone moving to Texas? 5 theories

The Economist says that people are moving to central Texas "in droves," largely from New York and California. What's behind the trend?

Using an interactive county-by-county U.S. migration tool from Forbes, New York–based blogger A.S. at The Economist finds that "people are moving in droves" to Travis County, Texas — home of Austin — mostly from coastal blue states. Why?

1. It's the low taxes: A primary reason is that Texas has "no state income tax," suspects A.S. "High-earning New Yorkers and Californians can take home between 9 percent and 11 percent more of their income" just by moving there. All in all, the trend "does not bode well for high-tax states with nasty fiscal problems."

2. It's housing costs: Texas is truly "one of the remarkable economic stories of the last decade," says fellow Economist blogger R.A. But its growth isn't due to "the mobile rich fleeing to places with the lowest tax rates." If you look closer at the data, the people moving out of the state are wealthier than those moving in — so my money's on the lower housing costs in Texas.
"Lands of opportunity"

3. It's the telecommute: "I think there’s another trend at work here — broadband," says Stacey Higginbotham in GigaOm. Especially in the tech industry, people who have reliable high-speed Internet access no longer need to live in Silicon Valley. "Sure there are days when I’m tempted to live where the action is instead of Austin," but given its lower cost of living generally, I'm always glad I don't have to.
"Will Silicon Valley remain the center of the tech universe?"

4. Maybe Austin gives you more bang for your buck: Lots of states have lower taxes than Texas, says Matthew Yglesias at Think Progress, and "the most-taxed states, Connecticut and New Jersey, are also the most prosperous." So to the extent that taxes play a role, it's really about value — low taxes and "subpar" services or high taxes and excellent ones. But A.S.'s map is also flawed, since it doesn't include the robust migration to blue states from overseas.
"International migration counts"

5. This whole premise is flawed: First, the difference in actual tax rates between Texas and California is about 1.3 percent of income, not 10 percent, says The Week columnist Brad DeLong in his personal blog. And since New York and San Francisco have more "dynamic and productive" economies than Austin, "you get what you pay for."
"And what are our immigrants from overseas, chopped liver?"

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