Shifting Tides: Texas and Florida Emerge as Beacons for Business and Population Growth

Over the last decade, a significant trend has emerged with businesses increasingly relocating from states with higher taxes to those offering a more favorable tax environment. This shift has notably benefited states governed by Republican leadership, with Texas and Florida at the forefront of this movement. A recent analysis by the Federal Reserve Bank of Dallas highlights this trend, revealing that between 2010 and 2019, Texas and Florida were the primary destinations for companies seeking a new base of operations within the United States.

Texas, in particular, has experienced remarkable growth, welcoming over 25,000 businesses during this period. These businesses have contributed to the state's economy by creating more than 281,000 new jobs. Despite the departure of 18,000 establishments, which resulted in the loss of approximately 179,000 jobs, Texas still achieved a net increase of 7,232 firms and nearly 103,000 jobs. This growth was unmatched by any other state, positioning Texas as the leading state for business migration and job creation in the nation.

Florida also emerged as a key destination for relocating businesses, leading the nation in this aspect, followed by Texas, South Carolina, North Carolina, and Arizona. The appeal of Texas to businesses is multifaceted, attributed to its low-taxation and regulatory environment, strategic central location, expanding population, and rich energy resources. Notably, Texas, alongside Florida, does not impose an income tax, further enhancing their attractiveness to businesses.

This phenomenon, often referred to as the 'Great Migration', has seen a significant number of Americans and businesses moving to Texas and Florida. California, on the other hand, has seen a considerable exodus, with more than 44,000 jobs relocating to Texas from the Golden State alone, accounting for about 16% of Texas's total job influx during the decade. In contrast, Texas transferred fewer than 15,000 jobs to California.

The movement isn't confined to businesses alone. According to an analysis by Bank of America, a notable pattern of population migration is occurring, with individuals moving to states like Florida and Texas. This analysis, based on aggregated and anonymized customer data, indicates that the migration trends spurred by the pandemic are continuing, with cities that witnessed significant population increases during the pandemic maintaining their growth momentum. For instance, San Francisco saw a substantial population decline at the beginning of 2023, experiencing more than a 1% drop in the first quarter alone and a more than 3% decrease from 2020 to 2022.

These trends underscore the changing landscape of business and population movements within the United States, with Texas and Florida leading the way as prime destinations for businesses and individuals seeking growth, opportunity, and a more favorable tax environment.