I don’t know why I have to keep shooting down this Sunbelt myth. No, people don’t like hot weather, they like nice weather. But they really, really like no state income tax. Here’s the US by region:
This link has census data for the most recent decade (2000-2010). The US population grew at 9.7% over that decade. Let’s start with the south central states, which are hot and muggy. Between Kentucky and Texas there are 8 purple states (9 if you include West Virginia). Six of the 8 (or 7 of 9) had population growth below the national average, including oil rich Louisiana and Oklahoma. So much for the sun “belt.” Tennessee and Texas were the only two that grew faster. And oh by the way, they are the only two with no state income tax.
On the west coast, all states grew faster than the national average. Yes, its climate is nicer that the south central region. But look at the more detailed data and you’ll see that hot and sunny Washington state and Alaska grew the fastest of five bordering the Pacific. And oh by the way, Washington and Alaska are the only two with no state income tax.
How about the 9 states in the northeast? All grew slower than the national average, but tropical New Hampshire was the fastest of the tortoises. And oh by the way, New Hampshire is the only one with no state income tax.
How about the 12 Midwestern states? Like the northeast it was a slow growing area. But the best of a bad lot was South Dakota. Non-American readers should know that South Dakota offers NOTHING. Choosing to move to South Dakota over the Twin cities area of Minnesota is like choosing Belarus over Stockholm, Sweden. Think of it as a slightly warmer “Fargo.” And oh by the way, South Dakota is the only Midwestern state with no state income tax.
In the inland southwest there are 5 fast growing states. Nevada easily led the group. And oh by the way, Nevada is the only one with no state income tax.
Yes, there are a few outliers. The only southeastern state with no income tax is Florida, which grew “only” by 17.6%. Florida was narrowly edged out by Georgia (18.3%) and North Carolina (18.5%). It’s worth noting that over multiple decades Florida has grown faster than the others, but with its population recently surpassing New York it may now be a bit congested. In fairness, the same problem applies to California (which grew 10%).
And the ninth state with no income tax is Wyoming, which led Montana but trailed Idaho in the northern Rockies region. Unlike Idaho, Wyoming basically has no cities. How many frustrated residents of Buffalo, NY suddenly decide, “I want to be a cattle rancher”?
For the US as a whole, only nine states lack a state income tax. And the fastest growing state in the entire country was Nevada (at 35.1%), one of those nine.
Lots of amazing coincidences between having no state income tax and population growth relative to your neighbors.
Paul Krugman says:
So when you ask why Sunbelt states have in general grown faster than those in the Northeast, don’t credit Art Laffer; credit Willis Carrier.
I say credit both Laffer and Carrier, at the margin. Good weather and low taxes are both important. But people don’t like south central unless you also eliminate state income taxes.
However . . . I predict that tax differentials will play a less important role in the future. Tyler’s right that as the country gets ever wealthier, amenities will play an increasing role. (The dramatic and underreported slowdown in New Hampshire’s growth is the canary in the coal mine for supply-siders.)
Some day I hope to move to sunny LA.