Migrants to Vermont Have More Income Than Those Who Leave

By Reenie De Geus (February 2010)

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Fewer people moved into Vermont than out in 2008, but those who moved in had more income per person than those who left the state or stayed put. This has been the trend in Vermont for the last 15 years (Figure 1).

The Internal Revenue Service follows patterns of movement from state to state by tracking where people are living when they file their tax returns. The number of exemptions claimed on the returns and the total adjusted gross income (AGI)¹ reported reveal the approximate number of people in a family and how much income they reported collectively.

New IRS data show that 15,028 people claimed as exemptions on federal tax forms moved into Vermont in 2008, compared with 16,551 people who moved out of Vermont. The average adjusted gross income of these immigrants in 2008 was $32,862 per exemption. The average income per exemption of those who left the state was $28,806, 12 percent less. The tax filers who stayed put in 2008 had an average income per exemption of $27,397.

Overall people moving to Vermont in 2008 had more income—both in total and per person—than those who left. Vermont gained the most income from New York, Massachusetts, and New Hamphires (Table 1). The top recipients of income from Vermont were New Hampshire, New York, and Florida.

The largest flows of people both into and out of the state in 2008 were from adjacent states. New York, New Hampshire, and Massachusetts accounted for 40 percent of new arrivals and 36 percent of departures. Newcomers from New York were more numerous and had more income per person than Vermonters moving to New York. Vermont had a net loss of people to Massachusetts, but the former Massachusetts residents had more income than the Vermont emigrants who moved south across the border.

With New Hampshire, the pattern was reversed. More people migrated to New Hampshire from Vermont than the other way around, and the average income per person moving to New Hampshire was higher than than those who came from there.

The income of emigrants to Florida rose in 2008. In 2007, the average income per person of Vermonters moving to Florida was $32,568. In 2008, it rose to $39,128. Some, including Governor Douglas, have argued that Vermont’s tax policies are driving higher-income people to Florida, which has no income tax. However, those moving to Florida from New Hampshire and Vermont have had similar incomes on average. Florida-bound New Hampshire residents have in fact had higher incomes than Vermonters moving to Florida in 9 of the last 16 years. Like Florida, New Hampshire has no income tax (Figure 2).

The overall migration figures are reported below. Table 2 shows total numbers of people moving in and out of the state and their aggregate incomes. Table 3 shows the flow of people moving to and from Vermont by state.

1. Income as reported on line 37 of the federal 1040 income tax form. [↩]