As Jon Shure of the Center on Budget and Policy Priorities notes in a recent blog post, a new American Legislative Exchange Council (ALEC) report (PDF) points to tax systems of Hawaii and Alaska as the reasons why Hawaii has lost more residents over the last two decades than Alaska has. Hawaii enjoys a healthy income tax while Alaska has no income tax.
ALEC brings up this example to attack state efforts to raise revenues for vital public services by asking the wealthy to contribute more and to promote repeal of (typically progressive) state income taxes. ALEC paints a picture of fleeing Hawaiians and half as many fleeing Alaskans in support of its efforts to repeal states' income taxes.
When comparing these two states and the degree to which people move to and from them, ALEC, not surprisingly, ignores factors other than taxes that influence a family's decision to move, such as differences in the job markets, energy prices, housing costs, and the like.
ALEC’s been having problems these days. Add to that the problem that in this latest report report ALEC neglected to look at migration between Alaska and Hawaii. As Shure notes,
slightly more households are moving from no-income-tax Alaska to high-income-tax Hawaii than the other way around. In 2010, the last year for which data are available, 300 households moved from Alaska to Hawaii; 287 moved the other way.
Shure is surely right that the omission of that fact is further proof that ALEC’s analysis is without merit.