New York and California saw a combined loss of $92 billion in income in 2020 and 2021 as high-earning workers moved to lower-tax states during the implementation of COVID-19 restrictions and work from home rules, accelerating an already established trend, according to IRS data.
New York saw the outflow of $20 billion in 2020 and another $25 billion in 2021, while California had losses of $18 billion and $29 billion respectively in the same years, CNBC reported.
The 2021 figures were three times higher than the losses suffered by New York and California from net outmigration in 2019.
CNBC quoted one expert as saying the relocation of high-income earners likely slowed in 2022 and so far in 2023, but the movement of wealth to lower-tax Sun Belt states is not ending.
The biggest beneficiary of the migration has been Florida, which saw a net increase of 128,000 households that brough with them an additional $39 billion income in 2021. Florida does not have a state income tax.
That was a 39% increase over the $28 billion in income that new residents brought with them in 2020.
Similarly, Texas has seen $11 billion in income arrive with new residents, nearly half of it, $5 billion, from California alone.
Nevada, North Carolina and Arizona saw a combined inflow of $14 billion in income with new arrivals during the same period.
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