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Tuesday, February 12, 2008

Golf or Taxes: What drives U.S. migration?

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    Sometimes the Wall Street Journal cannot get out of the way of its own orthodoxy.  Customarily scrupulous with the facts in its stories, the esteemed Journal sometimes plays a little fast and loose in its editorials, as it does today in trying to make the case that taxes drive our decisions about where to live.
    Pointing to the recently released annual survey of United Van Lines, which plots U.S. migration between states, the Journal's editors try to make the case that Californians are moving to Texas, for example, essentially

Given the chance and resources, would a dedicated golfer opt to play East Podunk Municipal rather than Pebble Beach because the latter is way more expensive?

because the former has the highest state income tax rate in the nation and the latter doesn't have one at all.    
    The Journal should know its wealthy readership better than that.  The fact is, the United Van Lines data shows that people move to find a better life, not to avoid a state income tax.  
    In the chart that accompanies the editorial, the five most popular destination states, in terms of net shipments into and from them by United Van, are North Carolina (+62%), Nevada (59%), Alabama (58%), Oregon (58%) and South Carolina (58%).  Nevada is the only one of the bunch without a state income tax.  But what Nevada has that California doesn't is cheaper housing, way less traffic and golf courses that don't require a degree in software engineering in order to secure a tee time.  
    Consider the L.A. baby boomer couple whose home has appreciated tenfold in the last 15 years and who have sat in traffic for two hours a day for much of their careers.  A home in the mountains outside Vegas or in the Texas Hill Country will cost a lot less than what they sell the L.A. place for, and with the change they
People move first and foremost to make a better life for themselves, not to squeeze every nickel from their tax returns.

pocket and the traffic they leave behind, their lifestyle takes a big turn for the better.  Taxes are virtually irrelevant to the equation, compensated by the reduction in housing costs and stress.
    Golf is a much better indicator of these migration flows than are income taxes.  Just look at those top five states and consider the numbers and range of golf courses - and golf communities - in all of them.  Think Bandon Dunes, Pinehurst, Myrtle Beach, the Robert Trent Jones Golf Trail...  
    Then look at the bottom five states:  Michigan(-68%), North Dakota(-67), New Jersey(-61), New York(-59) and Illinois(-58).  The Journal would have us believe that folks are fleeing those states because they all levy income taxes.  But in reality, most of them are going to other income tax states in the south and west.  
    Florida is the best example of why the Journal is dead wrong about the significance of income taxes.  The Sunshine State offers year round golf of great range and variety and charges its citizens zero income tax.  But Floridians are admitting to real estate agents and journalists that they are turned off by traffic, the threat of hurricanes and escalating insurance premiums.  They are exiting en masse and resettling in Virginia, the Carolinas and Georgia.  These are all income tax states but, importantly, all offer plentiful and year round golf (albeit some days a sweater is necessary).
    People move first and foremost to make a better life for themselves, not to squeeze every nickel from their tax returns.  The Journal's point is akin to saying that, given the chance and resources, a dedicated golfer would opt to play East Podunk Municipal rather than Pebble Beach because the latter is way more expensive.  I don't think so.

    The United Van Lines press release is available here.  The Journal op ed is available by clicking here.  If that doesn't work, send me a note and I will be happy to email you a copy.

Read 7510 times Last modified on Tuesday, 12 February 2008 08:48
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Larry Gavrich

This blog was conceived and is published by me, Larry Gavrich, a former corporate communications executive who founded HomeOnTheCourse, LLC, in 2005.  Our firm advises baby boomers and others seeking a lifestyle in which golf is a major component.  My wife Connie and I own a home in Connecticut (not on a golf course) and a condo at Pawleys Plantation in Pawleys Island, SC, on a Jack Nicklaus layout.  We began our search for our home on the course more than 15 years ago, and the challenges of the search inspired me to research golf communities and write objective reviews of them.

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