New York and California saw the largest loss of tax income from migration of any states, according to a new study of IRS migration data.
California lost $29 billion in adjusted gross income from migration out of the state in 2021 and $18 billion the year before, according to IRS data. Meanwhile, the Empire State lost $25 billion in 2021 and $20 billion in 2020.
California lost more than $340 million in 2021 IRS tax revenue as residents fled the progressive haven, according to online real estate portal MyEListing.com. Between January 2020 and July 2022, outmigration in the state surpassed in-migration by almost 700,000 residents.
“Despite its numerous attractions, from the booming tech industry and world-class universities to beautiful landscapes and cultural richness, California’s high personal income tax rates seem discouraging for many high-wealth individuals,” MyEListing wrote in its analysis. “This, coupled with the state’s high cost of living, will likely fuel a wealth migration out of California.”
The study comes as the state stares down a nearly $32 billion budget deficit, driven in part by the lower-than-predicted revenue.
Nonetheless, California governor Gavin Newsom told people not to “count us out.”
He claimed that, per capita, “more Floridians move to California than California is moving to Florida.”
But roughly 319,000 Americans moved to the Sunshine State last year, for the largest in-migration of any state, per the National Association of Realtors. As such, the state has experienced a $12.4 billion increase in tax revenue — the largest income from in-migration.
“High-income earners are increasingly choosing the Sunshine State, reflecting an age-old economic axiom: Money goes where it is treated best,” the study said
Texas came in second with $10.7 billion in new revenue from migrating residents.