State exit taxes are unconstitutional

The migration dynamics are quite different at the subnational level, which partially explains why state and local jurisdictions have not yet embraced exit taxes. Most obviously, migration within the United States does not implicate thorny citizenship issues. As such, state and local exit taxes would not serve a patriotic deterrence function.14 States may also be concerned about signaling hostility toward high-net-worth individuals and businesses, which would be counterproductive to attracting and retaining those taxpayers.15 Because interstate migration is much easier than renouncing national citizenship, taxpayers are more likely to respond to unfavorable state tax policy by leaving the state. State policymakers must also consider the complex constitutional limitations on state taxation. Exit taxes implicate the fundamental right to travel under the Privileges and Immunities Clause, a constraint with which most state tax policymakers have little experience.16 But perhaps the most likely reason why states have not embraced exit taxes is that, from a tax perspective, migration was approximately net neutral.17 If a state exit tax would not generate substantial revenue above the status quo, there is simply no point.18