DENVER (KDVR) — High earners left high tax states for lower tax burdens during 2020.
New analysis puts a dollar figure on the new migrants. In 2020, households earning more than $200,000 a year flocked away from California, Illinois, New York and Washington, D.C. for southern and western states. These households are the smallest portion of the nation’s income brackets. Only 7% of the nation’s households file returns of this size.
Florida had the highest net gain of high-income households with 20,263, followed by Texas, Arizona, the Carolinas and Tennessee.
High earners mainly fled a small handful of expensive coastal states. New York lost nearly 20,000 of these households, while California lost another 19,229. Illinois lost 8,044, followed by Massachusetts with 2,116 and Virginia with 2,099.
Some of this shift tracks with the country’s tax spreads.
Some of the states that had the highest net gain of high-income households, including Florida, Idaho, the Carolinas and Tennessee, have among the nation’s lower tax rates, according to a 2022 analysis by WalletHub.
Conversely, some of the states that lost the most high-income households also have the highest tax burdens. New York, the state that lost the most high-income households, has the nation’s highest tax burden. California, which lost the second most, has the ninth-highest tax burden. Illinois lost the third-highest number of high-income households and has the 10th-highest tax burden.
The trend is not universal. Colorado gained the seventh-most high-income households but has a middling tax burden, similar to Arizona. Maine gained a high number of wealthy households but has one of the nation’s highest tax burdens.