IRS Data on MD Taxpayer Departures Left to Interpretation

Recently released IRS data (admittedly from a few years ago, tax years 2011-12) again shows that more taxpayers left Maryland than moved into the State. However, differing interpretations of the data make it difficult to determine what it’s really telling us.

As reported by MarylandReporter.com,

“The IRS data presents a snapshot in time for Maryland,” said Daraius Irani, chief economist at the Regional Economic Studies Institute of Towson University. “While many would argue that aha, ‘MD is a high tax state and therefore people are leaving as a result,’ this is a fallacy as it confuses causality with correlation.”

But some argue it shows where dollars are moving and jobs are being maintained and generated – an important factor for policymakers to consider.

The data indicate that Maryland is a net loser in terms of net taxpayer income change when compared to other states.

The state ranked 45th for net taxpayer income change and 47th in terms of percentage, with a .9% decline in taxpayer adjusted gross income, trailed only by Illinois, Connecticut and Alaska. Nevada topped the list, with a net gain 1.97% adjusted gross income. In terms of total net adjusted gross income, Florida, Texas and South Carolina saw the biggest gains with $8.3 billion, $6 billion and $1.6 billion respectively.

The biggest disagreement seems to be over the reasons why individuals are deciding to leave the state.

Irani said that people could move due to the weather, retirement or new job opportunities, and because of the state’s size and location they may continue to work in the state while moving elsewhere.

Pettit said a Gallup poll that found Maryland had the third-most residents who planned to leave the state in the nation, also cited that 31% nationwide plan to move where the jobs are, not for factors like weather or family.

Read the full article, and policy debate, on the Maryland Reporter website.

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