IRS quietly discontinues study of moving taxpayers

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Betsi Fores The Daily Caller News Foundation
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The Internal Revenue Service has quietly ended a program that analyzes important economic information about taxpayer migration patterns, The Daily Caller News Foundation has learned.

Since 1991, the IRS, in collaboration with the Census Bureau, has provided statistical information regarding taxpayers moving around the country, showing which states are growing, which are growing, and what might be causing these shifts.

The data extends movement between cities and counties as well.

In an email obtained by The Daily Caller News Foundation, an economist at the IRS wrote last week, “We were just told this morning that the program is indeed going to be discontinued.  It is not our decision at all and we are very disappointed.”

“While the data may clearly reveal startling trends to the losing regions, this knowledge can be used to inform local communities on how to adapt to a pending economic crisis or, on the flip side, expand and support positive trends,” Forbes reported.

The data was used by Maryland taxpayer advocates Change Maryland to draw the connection between high income tax rates and high earners deserting the state for neighboring Virginia.

“The group’s research show[ed] that Maryland experienced the largest mass exodus of Marylanders between the years 2007 and 2010, with over 31,000 residents leaving the state,” TheDC News Foundation reported.

California and New York State have also been criticized for their high tax rates, based in part on this IRS data.

“This exodus represents a huge reversal to established patterns of domestic migration, and suggests that the Golden State is no longer perceived by most Americans as the land where dreams come true,” concluded a Manhattan Institute report, citing IRS taxpayer migration information.

A New York Post article titled “Outgoing Income, Millions Flee New York’s Tax Burden,” reported, “New York state tops the nation in one key export — people fleeing high taxes,” and makes reference to the IRS data used by the Tax Foundation.

As Reagan administration economist Arthur Laffer has said, “You have two locations, A and B. If you raise taxes in B and you lower them in A, producers and manufacturers and people are going to move from B to A.”

The Internal Revenue Service has yet to make a public statement over the termination of the program and did not respond to The Daily Caller News Foundation’s request for comment.

The program may have been terminated due to coordination problems between the IRS and the Census Bureau. The IRS economist suggested outside comments could potentially lead to the reversal of the decision.

“The very idea of people voting with their feet is uncomfortable to some politicians. Fortunately, others realize the damage that a declining tax base causes and prefer transparency over attempting to delete statistics that reveal the problem,” Jim Pettit of Change Maryland wrote in National Review Online.

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