In early December 2021, Elon Musk had announced that Tesla’s headquarters would officially move from Silicon Valley, California to Austin, Texas. Many former companies that were originally in Silicon Valley, such as Hewlett-Packard and Oracle, had already left California. Not only have these companies and other super-rich tycoons initiated this move, but other California residents have also proven that “moving out” is not just a campaign slogan. From 1980 to 2020, California’s population has steadily declined with each passing year. In 2021 and 2022, we noticed that there has been negative population growth. In fact, not only is the state of California undergoing this downward trend, but New York is also experiencing a similar situation, wherein population decline is becoming a major issue of key states. What exactly are the main causes? And who are the suitable ones for moving out of the state? Currently, the question of whether to move out of the state has become a major topic of today.

The Main Reasons Major US City States Are Experiencing Population Outflow

Why have some of the most popular areas with an ongoing flow of immigrants in the past, such as New York and California, have become a place of population outflow? We will closely analyze and discuss some of the major probable causes and reasons below.

• The Cost of Living is Too High

When the overall economy is not doing well, along with the burden of the increase in housing rent and home loans, as well as the costs and expenditures of living in major states, such as California and New York, residents will eventually become overwhelmed and forced to “leave” the state.

• Seeking Areas with Lower State Taxes

With the increase in state taxes, many might feel encumbered by the amount taxed. This, in turn, may be one of the main reasons why many might consider moving to other states or areas with no state tax. Please bear in mind, however, if it is just for the reason of saving on taxes, we suggest you re-examine and reevaluate your real assets. Are the taxes you’re paying really that high? Could there be room for saving on taxes? Usually, if the tax rates are not considered too high, then relocating to another state for a more comfortable environment may not be the best solution. However, if you can afford a much cheaper house, save more on taxes, and find a suitable job in another state, then it would be feasible to relocate. A solution that is more practical for higher income individuals, as the savings on taxes would make a considerable difference.

• Unfavorable Towards Companies

States with higher state taxes are usually not particularly friendly with some companies. State protection towards some of these business owners, in terms of legal proceedings and employee regulations are not usually adequate. Therefore, we see that many companies are slowly moving out of these states.

Will the Population Recover in a Short of Period of Time?

It really is hard to say, as many have already been heading towards this “moving out” trend. Some high-tech industries originally had planned to move to other states in order to save on expenses and to spend more time with their families during the Covid19 pandemic. However, as we have slowly recovered, many workers have returned to their original locations, and may not plan to move away in the upcoming future. On the whole, excluding the working high-tech employees, those who are waiting to retire and receive a steady flow of annual income from their retirement plans, are readily inclined to move to a more comfortable location with no state taxes.

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