The massive population loss that California and New York have experienced in recent years has been reflected in their tax revenues. The Golden State lost nearly $350 million due to migration in 2021. In second place, New York lost $299 million.
The real estate website MyEListing analyzed "wealth migration within the United States." It found that these two states experienced a significant loss of high-income population due to Democratic tax policies implemented by their state leaders:
High-income earners are moving (...) We've ranked U.S. states based on their net income migration, a critical economic indicator reflecting the movement of high-income earners. This measure culminates several factors, including tax laws, economic prospects and lifestyle offerings, that collectively sway where high-income individuals reside.
The study also indicated that high-income citizens are moving to states such as Florida and Texas, as these have "more accommodating" tax policies and these are "crucial elements fueling wealth attraction."
The trend of tax migration is becoming more pronounced, with wealth gravitating to regions such as Florida and Texas with more accommodating tax policies. The state's tax structure is one of the crucial elements fueling its wealth attraction. The wealth migration to these states has profound economic implications.
Why are people leaving California and New York?
The study found that "despite its numerous attractions," California ranked first among states that lost the most income due to migration. It identified its poor economy as the cause and explained that the high rates residents must pay for personal income tax are "discouraging for many high-wealth individuals."
"The booming tech industry and world-class universities to beautiful landscapes and cultural richness" go unnoticed due to the high cost of living. One of the most affected markets is real estate and job creation, "as these high-income individuals often play a significant role in business expansion and entrepreneurial activities."
New York took second place in the rankings. The study indicated that "despite being an economic powerhouse and cultural center, New York's high personal income tax rates and substantial cost of living are significant deterrents to wealthier residents. These factors push wealthy individuals to seek more financially favorable environments."
Florida and Texas gain population
Florida leads the country in attracting new residents ($12.4 billion in revenue). The study revealed that The Sunshine State draws attention "even among low-tax states like Texas." Beyond taxation, it stands out for its pleasant financial climate, growth prospects and protection of wealth and assets:
High-income earners are increasingly choosing the Sunshine State, reflecting an old economic axiom: money goes where it is treated best. Florida's appeal to high-income earners is increasingly palpable. It stands out even among low-tax states like Texas, underlining its attractive attributes.
Texas emerges second in receiving high-income migration with a net gain of $10.7 billion, The Lone Star State is known for its low taxes:
Various unique benefits attract these high net-worth individuals to the Lone Star State. Texas, like Florida, also boasts the absence of personal income tax, a significant lure for those with hefty incomes.
