Americans have always been a people on the move. Today, millions are moving from blue states to red states.

Why?

Let’s take a look.

Red states favor lower taxes, lighter regulation, and a smaller role for government. 

Think Florida, Texas, Tennessee, Utah, and South Carolina.

Blue states favor higher taxes, more regulation, higher government spending, and a larger role for government. 

Think California, New York, New Jersey, Massachusetts, and Illinois.

Herein lies the beauty of America's federal system: fifty different laboratories of democracy. States compete. They tax differently. Regulate differently. Spend differently. Govern differently.

So how do we know which system works best?

Here's one way: watch where Americans decide to live and work.

People can argue about politics all day long. But when they move their families, businesses, and money from one state to another, they're casting a very expensive vote.

Look at the numbers.

According to the US Census Bureau, between 2012 and 2024, Florida gained more than 1.7 million people from other states. Texas gained almost 1.5 million. Tennessee gained more than 400,000.

Now look at three of America's biggest blue states.

New York lost more than 2 million people, that's more than the population of Manhattan. California, 1.8 million. Illinois, almost one million.

Add it up. Florida, Texas, and Tennessee gained about 4 million. New York, California, and Illinois lost almost 5 million.

But here's the part that may be even more important.

When people move they take their money with them.

From 2012 through 2023, according to IRS tax return data, Florida gained about $1.3 trillion in adjusted gross income from interstate migration.

That’s trillion. With a “T.”

Texas gained nearly $371 billion. Tennessee, $112 billion.

That's roughly $1.8 trillion moving into those three states.

Now look at New York, California, and Illinois.

They lost roughly $311 billion.

That's an extraordinary transfer of people, purchasing power, investment capital, and tax base.

So, why are people moving?

While, of course, people have always moved for jobs, family, housing, retirement, weather, and plenty of other reasons, the current trend demonstrates that states’ policies have become the number one reason.

Let's start with taxes.

Florida, Texas, and Tennessee don't impose state income tax. Meanwhile, California and New York impose some of the nation's highest income-tax rates that can reach 15%.

For a wealthy investor, that can mean millions of dollars. But don't make the mistake of thinking this is only about millionaires and billionaires.

Taxes affect small-business owners. Young families trying to buy a house. Retirees trying to make their savings last. And when high earners leave, they take taxable income with them, leaving fewer taxpayers behind to finance the schools and other vital public services.

Progressives say higher taxes finance better services.

But do they?

If New York and California actually have cleaner streets and safer neighborhoods than Florida and Texas, why are so many New Yorkers and Californians leaving? 

Progressives also say bigger government creates a “fairer” society.

But according to the Census Bureau in 2024, income inequality is worse in New York than in Florida.

New York collects $12,500 per person in state and local taxes, more than twice as much as Florida. From 2000 to 2024, New York's per capita government spending quadrupled compared to Florida’s.

You’d expect, then, New York to be cleaner, safer, and have better public schools than Florida. 

But that’s not the reality. 

By most measures, while taking far less of its citizens’ money, Florida delivers better municipal services than its high-tax counterpart, and its educational outcomes are equal if not better.

Now consider another thing driving the moving vans: affordability.

Let's look at energy prices.

Eight of the ten most expensive states for electricity were blue states, while nine of the ten cheapest were red states. Among the large states, electricity prices in blue states were almost double those in red states.

And higher electricity costs raise the price of everything: rent, transportation, groceries.

Progressives have an obvious response: People are moving because of the weather.

Sure, weather matters. Americans have been moving south and west for decades.

But then you have to explain California.

California has everything: warm weather, beaches, mountains, world-class universities, Silicon Valley, Hollywood, and one of the most productive economies on Earth.

Yet California has still lost almost 2 million net residents to other states since 2012. For the first time in California’s history, more people are leaving than moving in.

You don't need an economist like me to tell you which policies people prefer.

Just watch where the U-Hauls are going.

I'm Stephen Moore, co-founder of Unleash Prosperity, for Prager University.