Florida continues its reign as a magnet for new residents and their wealth, solidifying its status as the top destination for Americans relocating from other states. Conversely, high-tax states such as New York, California, and Illinois are grappling with a significant outflow of population and taxable income, according to a new analysis released today by the National Taxpayers Union Foundation (NTUF).
The report highlights a decade-long trend (2011-2021) of interstate migration driven significantly by state tax policies.
During this period, Florida saw an astounding net gain of $196 billion in Adjusted Gross Income (AGI) due to new residents. Texas also emerged as a major beneficiary, with a net AGI increase of $54 billion.
READ: Florida Gov. DeSantis Vetoes Medical Malpractice Bill, CALA Applauds Move To Uphold Tort Reforms
In contrast, the data reveal a substantial financial drain from states with heavier tax burdens. New York experienced the largest loss, with a net decrease of $111 billion in AGI over the decade. California followed closely, losing $102 billion, while Illinois saw its AGI shrink by $63 billion due to out-migration.
“The American federalist system is a double-edged sword for states like New York, California, and Illinois,” Andrew Wilford of NTUF notes in his analysis. “While they have the power to set their own tax policies, taxpayers retain the freedom to leave for greener pastures should tax burdens in those states become overwhelming.”
This “voting with their feet” phenomenon, the report argues, is a powerful tool for taxpayers, influencing state policy more directly than individual votes in some cases. The analysis underscores that while many factors contribute to relocation decisions – including family, weather, housing, and employment – tax rates offer a compelling explanation for the broad migration patterns observed.
READ: Border Czar Tom Homan Blasts “Foolish” Illegal Alien Who Penned Trump Death Threat
The financial ramifications for states are substantial and cumulative. The report estimates that if current trends continue, California stands to lose approximately $4.5 billion in state and local revenue in 2025 alone due to excessive out-migration. For New York, the cumulative impact of AGI lost between 2011 and 2021 translates to an estimated revenue drain of around $68 billion over that decade.
Wilford points out that these losses are particularly impactful because “estimated revenue changes are driven primarily by the movement of high-income earners, who tend to pay far more in taxes than they receive back in government services.”
The report also touches on the case of Washington state, which, despite gaining nearly $11 billion in AGI over the last decade, has seen a recent downturn in its migration ranking (40th in the most recent year) following increases in tax obligations. The 2024 relocation of billionaire Jeff Bezos from Seattle to Florida is cited as a high-profile example of this shifting tide.
In response to losing residents and revenue, some states like New York and California have reportedly attempted to increase tax obligations on nonresidents. Wilford criticizes this strategy, labeling it akin to “taxation without representation” and arguing it complicates tax compliance and undermines the connection between taxes paid and services received.
READ: Texas Rep. Jasmine Crockett: Trump’s Insults Hide Secret Republican “Fans”
The analysis concludes with a clear message: “Year after year, IRS interstate migration data continues to tell a familiar story — taxpayers are leaving high-tax states for low-tax ones.” States losing residents are urged to re-evaluate their tax structures and focus on creating environments that attract and retain businesses and workers, rather than attempting to offset losses through higher taxes on remaining residents or nonresidents.
“States should recognize that a tax code that attracts businesses and workers and allows them to thrive is the path to long-term prosperity,” Wilford advises, emphasizing that the “nebulous population decrease” translates into very real financial consequences, such as California’s projected $4.5 billion annual revenue loss.
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Connect with us: Follow the Tampa Free Press on Facebook and Twitter for breaking news and updates.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
