Budget & Tax
Curtis Shelton | January 16, 2019
How money walks: Tennessee
Note: This is part of an ongoing series about how states attract income—actually, people who earn income—from other states. Data are from How Money Walks, a project that tracks income migration at the state and county levels. Using IRS data, it shows how states have gained or lost wealth between 1992 and 2016. This provides evidence about the effects of tax policy on where people choose to live. Other states in our series include Alaska, Nevada, Washington, Texas, and Florida.
Tennessee gained $14.31 billion of annual adjusted gross income from other states from 1992 to 2016. People from many different states have volunteered to relocate to Tennessee, but in a recurring trend, the state of California contributed more new wealth to Tennessee than any other single state.
Tennessee ranks well in two different analyses of economic competitiveness. It comes in 16th in the Tax Foundation’s State Business Tax Climate Index and 12th in Rich States, Poor States.
|Net Wealth Migration (1992-2016)||Gain of $14.31 billion||Loss of $1.22 billion|
|Income Tax Rate||0%||5%|
|State Business Tax Climate Index Ranking||16th||26th|
|Rich States, Poor States Ranking||12th||16th|
|State and Local Tax Per Capita||$2,707||$3,060|
|Tax Burden as a Percentage of Income||7.72%||8.73%|
Largely because of its no-income-tax policy, Tennessee has a lower tax burden compared to Oklahoma in per capita terms and as a percentage of income. However, the two states are similar in most other tax areas, including having relatively high sales taxes and low property taxes.
Aspiring country music artists have long made Nashville their home in the hopes of one day making it big. By letting people keep more of their own money, it is no longer just musicians who want their own Tennessee mountain home.
Policy Research Fellow
Curtis Shelton currently serves as a policy research fellow for OCPA with a focus on fiscal policy. Curtis graduated Oklahoma State University in 2016 with a Bachelors of Arts in Finance. Previously, he served as a summer intern at OCPA and spent time as a staff accountant for Sutherland Global Services.