Jim Pettit @ NRO:
As the din of America’s falling headfirst over the fiscal cliff reverberates across the nation, the Obama administration is quietly killing a key economic metric that tells how, and how many, people are voting with their feet. Since 1991 the Internal Revenue Service has been compiling statistics on filers’ addresses, which the agency’s Statistics of Income division uses to show who is moving into and out of every county and state in the nation. As you’d expect, the IRS also knows the aggregate income levels of those who move. So the movements of the most fundamental productive components of the economy — taxpayers — can be analyzed by journalists and economists, or could until now.
The IRS and the U.S. Census Bureau (which provides technical support in reporting tax migration data) have not made an official announcement as to why the program is being discontinued. So we are left to speculate why such vital economic statistics suddenly got canceled.
Some would be glad if the IRS data simply went away. Blue states with high state and local tax burdens have come out looking bad in recent years. California and New York have been embarrassed publicly, as a steady exodus is underway from both.
Regarding California, the free-market Manhattan Institute for Policy Research concluded in September that “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.”
The think tank, which analyzed ten years of IRS data to show that California’s population is fleeing to Texas, characterizes the agency’s data as the “most useful tool” among sources identifying migration patterns. The public-policy ramifications of a declining tax base are clear, according to the Institute: Economic damage ensues when companies, fearing inevitable tax increases, get cold feet in jurisdictions with declining revenues.