Tax Havens Move to the U.S.

As states raise their taxes to make up for their budget shortfalls, they are now finding that their citizens are moving across state lines, and even across the country, to avoid the heavier tolls.

As a recent article in Barron’s points out, states like Wyoming, Florida and Texas that lack income taxes are becoming ever more attractive. Of course, moving to no-income-tax states is not exactly the newest trend. Many people over the years have based their decision on where to live on the tax rates. But as the economy picks up steam once again, while tax rates continue to rise in those states still struggling to close their budget gaps, states are finding that more people are “voting with their feet,” as one economics professor puts it. Voting with their moving vans is another way to put it.

It’s ironic that as the U.S. presses countries like Switzerland, Monaco and Liechtenstein to end their traditional role as tax havens, some states within its own borders have effectively assumed that role.