Kingsport Spirit

I’ve come to realize that many states are trying to replicate what we have in Tennessee—no income tax, no personal property tax, and no inheritance or estate tax. At last count 15 states are trying, but it’s easier said than done because they’ve become accustomed to that revenue stream and rarely want to cut costs.

How did I reach that conclusion? I have followed the Institute on Taxation and Economic Policy (ITEP) for years. ITEP closely monitors activity in every state.

ITEP strongly criticizes Tennessee’s tax structure, calling it “regressive” and ranking it poorly on their “inequality index,” arguing that lower-income families shoulder the heaviest burden. However, their analysis seems to assume that taxes are the primary factor in economic well-being. Here’s where it gets interesting—9 out of 10 states on ITEP’s “Least Regressive State and Local Tax Systems” are not on the “Top 10 States People Are Moving To.”

One major reason? Cost of living. If you pay less in taxes but face higher costs for housing, goods, and services, are you truly better off? This raises a compelling question: Did progressive tax policies lead to a higher cost of living, or is it the other way around? It’s a classic chicken-or-egg dilemma, and the answer isn’t as straightforward as some might think.

1. Texas
2. Florida
3. South Carolina
4. North Carolina
5. Georgia
6. Tennessee
7. Nevada
8. Maine
9. Delaware
10. Idaho

Curious about this contradiction, I dug deeper. But don’t just take my word for it—look into it yourself.

Key Factors Driving Migration

Cost of Living Differences – States with progressive tax systems tend to have higher costs of living on everyday items like gas, groceries, and utilities. Lower-tax states offer more affordability.

Tax Burdens – Many prioritize keeping more of their income over a more equitable tax system, making states with no income tax attractive despite their regressive structures.

Housing Affordability & Job Markets – High housing costs in progressive-tax states push residents out, while job growth in lower-tax states draws them in.

Business & Retirement Considerations – Businesses and retirees flock to states with lower corporate, property, and income taxes, increasing migration to tax-friendly states.

Bottom Line

The least regressive states offer stronger social safety nets, but they also come with a higher cost of living. Many people prioritize affordability, lower taxes, and economic opportunity over tax fairness when deciding where to live.

Everything is a math problem, for both families and governments. Bigger government means bigger costs. In my opinion, people should be charitable because it’s in their heart. As I often said during my years as a city manager, taxes are not optional. By that I mean the government can seize your property and impose criminal charges for nonpayment. That’s a sacred trust between the government and the people. I once had a corporate executive say, “Don’t you think businesses would like the option to simply raise prices (taxes) instead of making the painful choices to balance our bottom line?”. That profoundly changed the way I looked at things.

Conclusion

The numbers tell a clear story: People aren’t just chasing tax policies deemed “fair.” They’re looking for places where their money stretches further. If states want to attract and keep residents, they should focus on what’s actually driving migration—not just tax theory.