Choosing Between Red and Blue States: Where Should You Live Based on Politics and Policy?
Election seasons often stir strong emotions, with some people vowing to relocate if their preferred candidate doesn't win. Statements like, "If Candidate X wins, I'm leaving the country!" capture just how intense these times can be. Yet, despite the political rhetoric, America remains a country where few truly consider leaving. However, we may now see a significant shift as Americans consider moving to states that align more closely with their political and financial beliefs. This trend is influenced by issues like inflation, immigration, and abortion. In a politically polarized country, where you live can significantly affect your cost of living, personal freedoms, and lifestyle. Now more than ever, families are considering moves to states that better align with their values.
The Influence of Politics on Moving Decisions
According to a survey by Realtor.com, about 23% of Americans say that national and local politics play a significant role in their decision on where to live. Among millennials, this number rises to 33%. In fact, nearly 1 in 5 (17%) Americans have considered moving because their political views don't align with those in their current state.
So where would you move based upon some of these top issues?
Financial Factors: Taxes and Cost of Living
States with No Income Tax
For some, state tax structures are pivotal in choosing where to settle down. Currently, nine states across the nation do not impose any state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Notably, Washington does levy a capital gains tax targeting high earners, while New Hampshire taxes dividends and interest. Among these nine states, the majority - approximately two-thirds - are red-leaning, while the remaining states lean blue.
States with High Income Taxes
On the other end of the spectrum, states with the highest income taxes in the U.S. tend to lean blue.
- California: 13.3%
- Hawaii: 11%
- New Jersey: 10.75%
- Oregon: 9.9%
- Minnesota: 9.85%
Real Estate and Property Taxes
These five states have the highest property taxes in the country and historically lean blue.
- New Jersey: 2.23%
- Illinois: 2.08%
- New Hampshire: 1.93%
- Vermont: 1.83%
- Connecticut: 1.79%
State Sales Taxes and State Deficits
The following states boast the highest sales tax rates, with both red and blue-leaning states making the list:
- Louisiana: 9.56% - Red
- Tennessee: 9.55% - Red
- Arkansas: 9.45% - Blue
- Washington: 9.38% - Red
- Alabama: 9.28% - Red
In terms of budget deficits, these states have had consistent deficits in at least 11 of the past 15 years:
- New Jersey: Revenue met only 93.9% of total expenses - Blue
- Illinois: 95.3% - Blue
- Connecticut: 95.8% - Blue
- Hawaii & Massachusetts: 96.9% - Blue
- New York: 99.7% - Blue
When it comes to how you fundamentally view taxation and where to live, you might notice a pattern: states with lower income taxes often offset this with higher consumption taxes. Are you for small government or big government? Are you for high state income taxes or higher consumption taxes? Are you for bigger state funded social policies or fewer social policies? Are you for mansion taxes and state capital gains taxes or not? These questions may be important for you to evaluate after this election. Outside of the weather, career opportunities, and proximity to family, does the state you're living in (or considering moving to) have fundamental tax and social policy philosophies that align with your own?
Abortion Access: A State-by-State Divide
With the Supreme Court's recent ruling to overturn Roe v. Wade, abortion rights are now determined by individual states. Currently, 17 states have passed laws protecting abortion access, while 12 states have enacted laws that heavily restrict it, often to around six weeks or less. Abortion will continue to be a front and center issue that not only divides America but makes a clearer choice for Millennial and Generation Z families on where they choose to reside. Post election, you may need to decide how you lean on this highly debated social and religious issue and whether this would move the needle for you change the location of where you raise your family.
Social Policies: Welfare, Healthcare, and Education
Each state develops its own policies on critical social issues like poverty, welfare, infrastructure, healthcare, education, sports gambling, marijuana, criminal prosecution and gun laws. Although all states value individual rights and autonomy, the role of local and state government intervention is crucial in shaping these policies. Should the state determine which books are permitted in public schools? How does it address homelessness? What stance does it take on background checks for gun ownership? These types of issues and many more may serve as the future springboard for you to decide where you want to live in the future.
The Role of Happiness and The Future
You may be familiar with the Happiness Index, which ranks countries based on factors contributing to overall happiness. These studies evaluate six key categories, such as GDP per capita, social support, and healthy life expectancy. Finland, Denmark, Iceland, and Sweden consistently rank at the top - have you wondered why?
Years ago, the United States embraced the concept of the "melting pot," envisioning a society where diverse immigrant groups would blend together, gradually adopting the dominant culture and creating a unified identity. Yet, recent elections suggest a new trend: people increasingly choose to live in areas that reflect their specific social, cultural, and financial values. This shift hints that the happiest individuals seek communities that share their way of thinking. And as this trend unfolds, red states grow redder, blue states bluer, with people gravitating toward others who think and act similarly. It's a movement happening right before our eyes.
Where you call home can have a significant impact on your cost of living, rights, and sense of belonging. Whether you prefer the policies of red states or the values of blue states, it's becoming more and more paramount to consider the impact that location will have on your lifestyle, beliefs, and future.
