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IRS Data Show Major Outflows From California and New York as More States Pursue Wealth and Exit Taxes

Business leaders warn higher taxes are driving relocations to lower-tax states.

Overview

  • The IRS migration files for 2022 to 2023 show New York and California lost 373,309 residents and $23.5 billion in adjusted gross income.
  • Florida and Texas gained income over the same period, adding $20.5 billion and $5.5 billion as movers sought lower taxes.
  • At least ten states are weighing or have adopted wealth or exit taxes, with California, New York, Washington, and Michigan identified in new reports.
  • Washington approved a 9.9% tax on income above $1 million, and California’s proposed Billionaire Tax Act would levy a one-time 5% charge on residents worth over $1 billion.
  • Business leaders and officials warned of tax flight, with JPMorgan’s Jamie Dimon criticizing high-tax policies, Gov. Kathy Hochul acknowledging New York’s eroding base, and WSBT citing high-profile moves such as Howard Schultz to Florida.