Did you expect the usual stories that come out of spring training would include talk about taxes?  We didn’t either. But a recent article from the sports page in Minneapolis illustrates how high taxes impact where people live – even baseball players.

Minnesota Twins prospect Royce Lewis explained his decision to move from California to Texas. One of the reasons was because Texas doesn’t have a state income tax and Lewis had a $6.725 million signing bonus.

“I didn’t really know about taxes. Then my W-2 came in from the contract I signed, and I was like, ‘Yeah, I need to go.’ ” 

– Royce Lewis

It’s not just athletes who consider their tax bill when relocating. For over a decade, Rich States, Poor States has shown states with lower taxes, specifically low income taxes, have had more people move into their state than states with high income taxes.

U.S. Census Bureau data shows in 2018, Iowa:

Gained residents from states with higher taxes:

  • Illinois: net gain of 7,772
  • California: net gain of 1,974
  • Minnesota: net gain of 1,660

Lost citizens to states with no income tax:

  • Florida: net loss of 1,607
  • South Dakota: net loss of 2,434
  • Texas: net loss of 2,979 

People move for many reasons, but the amount of money state government takes from taxpayers plays a part.

Iowa is in competition with the rest of the country, especially our Midwestern neighbors, to attract and retain people and businesses. Taxes matter, and the best way to improve Iowa’s tax code is to cut income tax rates.

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