Recent analysis of migration statistics from the IRS showed that New York and California suffered the worst losses in tax revenue from migration of any state.
Loss of Tax Income
Based on internet real estate company MyEListing.com, California lost more than $340 million in 2021 IRS tax revenue as citizens left the progressive sanctuary. Between January 2020 and July 2022, the state’s net migration was over 700,000 more than its net outmigration, report from nationalreview.com.
The investigation is being conducted as the state struggles with a budget shortfall of around $32 billion, which is being partially caused by lower-than-expected revenue.
According to IRS data, migration out of California cost California $29 billion in adjusted gross revenue in 2021 and $18 billion the year before. The Empire State lost $20 billion in 2020 and $25 billion in 2021, respectively.
New York’s and California’s Outmigration
Gavin Newsom, the governor of California, nevertheless urged people not to include them. According to him, more Floridians move to California per capita than Californians move to Florida.
Despite California’s many charms, like its thriving tech sector, world-class colleges, stunning natural scenery, and rich cultural heritage, MyEListing said in its report that many high-income people find the state’s high personal income tax rates disheartening. This, together with the high cost of living in the state, will probably encourage a wealth exodus from California.
According to new IRS figures, New York and California lost almost $90 billion in revenue during COVID, said CNBC. National Association of Realtors, however, showed that some 319,000 Americans migrated to the Sunshine State last year, making it the state with the highest in-migration. As a result, the state’s tax revenue increased by $12.4 billion, the most from in-migration ever.
According to the report, high-earners are increasingly preferring the Sunshine State, which is consistent with the old adage in economics that money travels to where it is treated the best.