California's population has declined for the third consecutive year, with many wealthy residents moving eastward, as per U.S. Census Bureau data. A study on IRS Migration Data by a real estate portal revealed California suffered the most significant loss of tax income due to migration among all states.
The Wealthy Are Fleeing
MyEListing.com's study unveiled that California suffered a staggering loss of over $340 million in 2021 IRS tax revenue as a result of resident migration. While approximately 40% of Californians had seriously considered leaving the state due to the high cost of living, the departure of affluent individuals remains enigmatic. The website's analysis suggests that despite California's allure with its scenic landscapes and cultural abundance, the state's elevated personal income tax rates appear discouraging to many high-earning individuals. Coupled with the high cost of living, this trend is likely to fuel a migration of wealth out of California.
Despite being the entertainment and Silicon Valley hub, California is witnessing high-earning individuals choosing to relocate, no longer bound by residency for their careers and businesses. Prominent figures like Elon Musk, once the world's wealthiest, publicly moved to Texas. Entertainers Joe Rogan and Rob Schneider, who voiced criticism about the state's politics, also left.
Florida emerged as the major beneficiary, with a staggering $12.4 billion surge in IRS tax income from migration, as per the real estate study. This trend indicates a shift in the preferences of the wealthy, seeking alternatives to California's high costs and taxes, impacting both the state's economy and social landscape.
Florida, Texas, and Arizona emerged as the top states benefiting from IRS tax gains due to migration, while California, New York, and Illinois faced the most substantial losses. The states with the largest net positive tax income migration were ranked as follows:
- Florida: $12.4 billion
- Texas: $10.7 billion
- Arizona: $9.4 billion
- Colorado: $8.6 billion
- North Carolina: $7.8 billion
- South Carolina: $7.2 billion
- Tennessee: $6.9 billion
- Utah: $6.7 billion
- Georgia: $6.6 billion
This data showcases the significant financial impact of migration on these states' tax revenues. The study examined IRS data for the 2021 tax year, revealing the states with the largest net negative tax income migration:
- California: -$343.2 million
- New York: -$299.6 million
- Illinois: -$141.7 million
- New Jersey: -$135 million
- Massachusetts: -$129 million
- Ohio: -$122 million
- Pennsylvania: -$119 million
- Michigan: -$117 million
- Indiana: -$115 million
Data for the 2022 tax year is expected to be released later this year, providing further insights into migration trends and their impact on state tax revenues.
This article was produced and syndicated by Max My Money.
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