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Or at least it seems that way considering how many Americans chose to move out of state, and in doing so picked locations that offer less of a wallop on the wallet taxwise.
Two of the most populated and highest taxing states in the country — California and New York — lost about $92 billion in income over two years as a result of the recent exodus.Here’s what’s driving this great migration and where those billions of dollars landed.
What the numbers show New York state lost $25 billion in adjusted gross income from migration out of the state in 2021, according to Internal Revenue Service (IRS) data analyzed by CNBC .This was on top of the $20 billion the state lost in 2020.
As for California, the Golden State lost $29 billion in 2021 after losing $18 billion in 2020: a total of $92 billion between both states over just two years.And overall, both states went from a budget surplus to a deficit .
However, New Yorkers and Californians can’t put all the blame on COVID-19.Migration from both states represents a growing trend that merely picked up speed during the pandemic as higher-income earners and businesses seek out lower-tax areas to set up shop.
Even so, the numbers were staggering.California and New York have seen more than three times the combined losses from before the pandemic in 2019, according to CNBC.
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Florida soaking up the benefits So where are those taxpayers headed? Florida, it turns out.
In fact, for the first time in 40 years, Florida came out as the big winner migration-wise.
Based on data from the Bureau of Labor Statistics, Florida accounted for 9.6 million non-farm jobs by the end of 2022 — on par with New York’s tally of just below 9.7 million.
In fact, Florida has just recently surpassed New York, per CNBC.
Florida is now rolling in dough from all this migration and job creation.The state brought in $39 billion in income during 2021, a 39% increase from the $28 billion the year before.Nearly a third of Florida’s gain — about $10 billion — came from New York.
It’s clear why, as New York holds income tax rates that range as high as 10.9% compared to Florida’s income tax of … bupkis.That’s right: no income tax.
The income and population shifts on the East Coast roughly correlate with those between Texas and California.Texas added $11 billion in income in 2021, with $5 billion of that coming from migrating Californians.
Like New York, California has graduated income tax rates — topping out at 13.3% for anyone making more than $1 million, the highest tax rate in the nation.And like Florida, Texas has no income tax.
It’s no wonder that as of mid-2023, both California and New York predict deficits where surpluses once stood.
The Golden State projects a deficit of $24 billion in 2023, with New York’s shortfall expected to swell to over $7 billion by 2025.
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This article provides information only and should not be construed as advice.It is provided without warranty of any kind..
