California and New York lost $ 92 billion due to the rich who left: where are they fleeing and why - ForumDaily
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California and New York lost $ 92 billion due to the rich who left: where are they fleeing and why

The two most populous states with the highest taxes in the country—California and New York—have lost about $92 billion in revenue in two years as a result of residents moving out of those states. What drives this great migration, and where these billions of dollars have settled, reports Yahoo.

Photo: IStock

If the pandemic has brought us too close to one of life's unavoidable things — that is, death — then it has also made many Americans think about another: taxes.

Or at least it seems that way, given how many Americans have chosen to move and in doing so have chosen states that offer less painful hits to the wallet in terms of taxation.

What the numbers show

Internal Revenue Service (IRS) data showed that New York State lost $25 billion in adjusted gross income from out-of-state migration in 2021. That's on top of the $20 billion the state lost in 2020.

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As for California, the State lost $29 billion in 2021 after losing $18 billion in 2020. A total of $92 billion was lost by 2 states in just two years. And in general, these states have gone from budget surpluses to deficits.

However, residents of New York and California cannot place all the blame on COVID-19. Migration from both states is a growing trend that has simply picked up speed during the pandemic as higher-income individuals and businesses seek lower-tax areas to start their businesses.

Regardless, the numbers were staggering. In California and New York, cumulative losses are more than three times what they were before the pandemic in 2019, according to CNBC's analysis of IRS statistics.

Florida enjoys the benefits

So where are these taxpayers running? Florida, apparently.

In fact, for the first time in 40 years, Florida has come out on top in terms of migration. By the end of 2022, Florida had 9,6 million non-farm jobs, according to the Bureau of Labor Statistics, matching New York's figure of just under 9,7 million. In fact, according to a CNBC article, Florida has only recently surpassed New York.

Florida has benefited from all this migration and job creation. In 2021, the state's revenue was $39 billion, up 39% from $28 billion a year earlier. And the largest influx of residents? From New York State.

It's understandable why, since New York's income tax rates are as high as 10,9% compared to Florida's income tax...which is not.

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The movement of income and population on the East Coast roughly correlates with movements between Texas and California. Texas revenue increased by $2021 billion in 11, of which $5 billion came from migrating Californians.

Like New York, California has graduated income tax rates, with a top tax rate of 13,3% for anyone earning over $1 million, the highest tax rate in the country. Like Florida, Texas has no income tax.

You may be interested in: top New York news, stories of our immigrants, and helpful tips about life in the Big Apple - read it all on ForumDaily New Y.

Not surprisingly, as of mid-2023, both California and New York are predicting a deficit where there once was a surplus. California projects a $24 billion deficit in 2023, with New York's deficit expected to widen from about $1 billion in 2023 to $7,07 billion by 2025.

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