High-tax blue states losing residents, tax revenue – red states reap benefits, lead in job and population growth

Americans are fleeing blue states at an increasing rate to move to low-tax Republican-led states, which are gaining tax revenue and leading in job and population growth, according to new Internal Revenue Service reporting for 2021.

Recently released IRS data revealed that high-earning taxpayers are leaving Democrat-run states, including Illinois, New York, and California, for states with lower tax rates, including Florida and Texas, the Wall Street Journal reported.

According to the data, 105,000 taxpayers fled from Illinois in 2021, which bled the state of $10.9 billion in adjusted gross income, up from $8.5 billion in 2020 and $6 billion in 2019.

Similarly, 262,000 former New Yorkers took $24.5 billion in AGI when they moved out of state in 2021, compared to a $19.5 billion loss in 2020 and $9 billion in 2019.

In 2021, California lost nearly 332,000 people and $29.1 billion in AGI, more than triple its 2019 losses, according to the WSJ.

California lost the most residents, followed by New York, Illinois, Massachusetts, and Louisiana.

Meanwhile, red states reaped the benefits of the Democrat-led states’ tax revenue losses. Low-tax states added $100 billion of income in 2021.

States that gained the most residents included Florida, Texas, North Carolina, South Carolina, and Tennessee.

Florida increased its AGI by $39.2 billion and gained 225,000 residents in 2021, compared to $23.7 billion in 2020 and $17.7 billion in 2019. The new out-of-state revenue came from Americans fleeing high-tax states, including $9.8 billion from former New York residents, $3.9 billion from Illinois, $3.7 billion from New Jersey, and $3.5 billion from California.

According to IRS data, on average, residents fleeing Illinois and New York earned $30,000 to $40,000 more than those moving to the states in 2021. In contrast, those arriving in Florida typically earned more than twice as much as those leaving.

Texas gained 175,000 people and $10.9 billion in 2021, up from $6.3 billion in 2020 and $4 billion in 2019. More than half of Texas’ 2021 income gain came from former California residents.

That same year, California hemorrhaged another $4.4 billion to Nevada, $2.7 billion to Arizona, and $2 billion to Washington.

Job growth in red states also outpaced its blue-state counterparts. Florida’s employment increased by 4.5% over the past year, while Texas grew by 4.3%. Meanwhile, California’s job growth only increased by 2.5% and Illinois' by 2.2%.

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