In his recent speech calling for legislation to stop corporate inversions, President Obama added fuel to the misperception that when a company moves its headquarters to another country it avoids paying U.S. taxes. He...
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- IRS Reverses Course, Will Continue Providing Migration Data
IRS Reverses Course, Will Continue Providing Migration Data
Over at interactive.taxfoundation.org, you can plug in a state and a start year and see how many tax filers have moved into and out of that state over time, and how much income they took with them. The underlying data comes from the Internal Revenue Service (IRS); although tax policy is just one of many factors driving interstate migration, the data is vital to seeing trends and using economic tools to measure what might have caused them. (States like California, Illinois, and Maryland have also found the data embarassing, as it shows negative net migration year after year.)
Hence the outrage when the IRS announced that they were canceling the program. An IRS economist, informed of the decision by higher-ups, told the Daily Caller: "We were just told this morning that the program is indeed going to be discontinued. It is not our decision at all and we are very disappointed." Jim Pettit, of the activist group Change Maryland, penned a National Review piece noting that the decision came soon after the data put Maryland Governor Martin O'Malley on the defensive (O'Malley has routinely asserted that Maryland has a great tax system and business climate, despite strong evidence to the contrary), and the Washington Examiner followed up with an editorial saying that the data is vital for ascertaining which "model" of states (high-tax, high-service vs. low-tax, low-service) Americans were preferring. Members of Congress also started calling, demanding an explanation.
The IRS yesterday issued its first statement on the matter, in which it appears to reverse course on the cancellation (partially posted here):
To improve data quality, the methodology for collecting and tabulating the population migration data was recently changed. During the transition, the tabulation no longer included income-related data. However, the IRS remains committed to producing migration and income-related statistics and will continue to produce this series. Statistics for 1990 through 2010 are currently available. Statistics for 2011 will be posted as soon as they are completed. In addition, work is underway at the IRS and the Census Bureau to develop additional migration statistics that take advantage of improved methods.
The IRS has confirmed that it will be the same program without a radical change, although they will not give a target date for the 2011 data release. The IRS should be applauded for continuing to provide this data. However, I'm immensely curious as to who ordered them to cancel it in the first place, and why.
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