The Tax Foundation produced a report showing the overall gain (and loss) of population and taxpayers’ Adjusted Gross Income (AGI) during the second half of 2019 through the first half of 2020. For the most part, high tax states were the biggest losers while low tax states were the biggest winners. While the data includes a portion of the pandemic, “These data, therefore, capture many of the interstate moves made early in the pandemic—between mid-March and mid-July 2020—but do not necessarily capture the bulk of pandemic-related moves, many of which occurred later in 2020 and even into 2021. As such, when interpreting these data, it is important to keep in mind that many of these moves happened before the even more pronounced shift away from large cities and high cost-of-living areas that occurred during the pandemic. [emphasis in original]”
Some of these losses are eye-popping. New York (which is dead last on this list) lost $19.5 billion in AGI and 248,305 taxpayers. California (ranking 46th) lost more in population (263,344) but “only” $17.8 billion in AGI. Meanwhile, Florida gained $23.7 billion in AGI and 166,707 in taxpayers (ranking 4th). Idaho topped the list with a gain of $2.1 billion in AGI and 36,655 in taxpayers.
This is one area where it’s a zero-sum game. Every taxpayer who moves between states ends up somewhere else. If a state loses enough population, the state is forced to make changes. Indeed, that time is likely coming soon for New York and Illinois–their current trends are just not sustainable. Meanwhile, the legislature in New York proposed tax increases. (To her credit, Governor Hochul vetoed the legislation.)
For those who say it’s related to weather, sure, that’s a factor. Yet Maine–not exactly the warmest state in the Union–ranks seventh. Indeed, combine sound fiscal practices and great weather and you get Florida. I’d advise politicians in California, New York, and Illinois to carefully read the study (but I doubt they will).
Here’s an image from the Tax Foundation:
