News/Commentary

Two blue states hemorrhaged more tax revenue than all others in 2021 thanks to fleeing residents

July 29, 2023 | | Print Article

The facts don’t lie, and the facts are that New York and California hemorrhaged the most tax revenue out of all the states in 2021 thanks to an exodus of residents.

According to a study by MyEListing.com, an online real estate portal, California in particular experienced “the worst net negative tax income migration,” losing $343.2 million in 2021 alone because of how many people fled the state.

Why? While the reasons should be obvious to any conservative — high crime, high homelessness, high taxes, high cost of living, overregulation, draconian COVID policies, etc. — MyEListing.com attributes it primarily to just high taxes and high cost of living.

“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,” the study notes.

“This, coupled with the state’s high cost of living, will likely fuel a wealth migration out of California,” it continues.

True.

Fox News reports that “[f]rom January 2020 to July 2022, the state lost well over half a million people, with the number of residents leaving surpassing those moving in by almost 700,000.”

This has led to tangible consequences, with California losing one House seat. But it’s not even over yet.

A recent poll showed that over 40 percent of California residents are currently considering leaving the state. Among this 40 percent, a reported third said they were motivated to leave specifically because of the state’s radically far-left policies.

Over on the East Coast meanwhile, New York came in second place, losing $299.6 million in 2021 because of so many fleeing residents.

“Despite being an economic powerhouse and cultural hub, New York’s high personal income tax rates and substantial cost of living are significant deterrents for wealthier residents. These factors push high-wealth individuals to seek more financially favorable environments,” the study states.

This should come as no surprise given as New York is, in many ways, a mirror image of California. In fact, in certain ways, it’s even worse than its West Coast counterpart.

“A separate study by WalletHub found recently that New York imposes the most burdensome taxes on its residents of all the country’s 50 states,” according to Fox News.

As for the rest of the top 10 states that lost tax revenue due to migration, they’re almost all blue states: Illinois (D), New Jersey (D), Massachusetts (D), Ohio (R), Pennsylvania (D), Michigan (D), and Indiana (R).

Conversely, the top ten states that GAINED revenue are Florida (R), Texas (R), Arizona (D), Colorado (D), North Carolina (D), South Carolina (R), Tennessee (R), Utah (R), and Georgia (R).

Florida specifically earned a whopping $12.4 billion in extra revenue because of new residents from, you guessed it, the likes of New York and California.

“Over the past year, the economic spotlight has focused on Florida as it leads the nation in net income 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 notes.

“Florida’s appeal to high-income earners is increasingly palpable. It stands out even among low-tax states like Texas, underlining its compelling attributes. The state’s financial landscape, myriad growth prospects, and debtor protections present a lucrative proposition for individuals and families with substantial income and assets,” it continues.

Under Gov. Ron DeSantis, Florida has become both a deep-red state and also the most popular state in the country.

“Tampa is the third-most popular city among homebuyers who are relocating nationwide, according to a new report by real estate listing company Redfin. Florida cities dominate the top ten, with five cities from the Sunshine State making the cut,” USA Today reported on Friday.

Florida reportedly also boasts the best economy:

Coming in at second place, tax revenue-wise, is Texas.

“Texas emerges as a star player in tax income migration, securing the second position among states with the highest positive net income migration. With a whopping $10.7 billion net gain, Texas is a favored destination for high-income earners seeking financial prosperity and tax advantages,” the MyEListing study notes.

“Various unique benefits draw 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,” it continues.

And like Florida, Texas is a deep-red state whose policies are family and business-friendly…

Vivek Saxena
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