BLS and IRS data lag, so we do not yet know the numbers of 2022, but the high tax Blue state trends don’t look goof for states on the left side of the above chart.
The Wall Street Journal reports The Blue State Exodus Accelerates
Illinois Gov. J.B. Pritzker shrugged last year after several high-profile corporations left his state. “Countless companies are choosing Illinois as their home,” Mr. Pritzker said. Then why does a new Internal Revenue Service report show an accelerating taxpayer exodus from Illinois and other high-tax states?
The IRS data shows a net 105,000 people left Illinois in 2021, taking with them some $10.9 billion in AGI. That’s up from $8.5 billion in 2020 and $6 billion in 2019. New York’s income loss increased to $24.5 billion in 2021 from $19.5 billion in 2020 and $9 billion in 2019. California lost $29.1 billion in 2021, more than triple what it did in 2019.
By contrast, the lowest tax states added some $100 billion of income during the pandemic. Zero-income-tax Florida gained $39.2 billion—up from $23.7 billion in 2020 and $17.7 billion in 2019. About $9.8 billion of the total arrived from New York, $3.9 billion from Illinois, $3.7 billion from New Jersey and $3.5 billion from California.
Texas was another winner, attracting a net $10.9 billion in 2021, which follows a gain of $6.3 billion in 2020 and $4 billion in 2019. Californians represented more than half of Texas’s income gain in 2021. The Golden State also sent $4.4 billion to Nevada, $2.7 billion to Arizona and $2 billion to Washington. Nevada and Washington don’t tax wages, and Arizona is phasing out its income tax.
Illinois lost income to all of its neighboring states, but the biggest beneficiaries of its taxpayer flight were Florida, Texas, Indiana and Wisconsin. Mr. Pritzker can’t blame lousy weather since it’s not exactly balmy in Kenosha. Billionaire Ken Griffin cited Chicago’s out-of-control crime last year as the reason he moved his hedge fund to Miami.
Wirepoints Spotlight on Illinois
With a special spotlight on Illinois, Wirepoints reports New York, California, Illinois are the nation’s big losers of people and their wealth, Florida, Texas the big winners
The latest IRS state-by-state migration data is based on tax returns filed in 2020 and 2021, covering taxpayers (tax filers and their dependents) who moved from one state to another between 2019 and 2020.
Florida, the nation’s perennial winner, gained in 2020 the most net people, 256,000, and the most net Adjusted Gross Income (AGI), $39 billion. Texas followed with a gain of 175,000 people and $10.9 billion in AGI.
In contrast, states like California, New York and Illinois once again experienced some of the nation’s biggest losses. California lost more people than any other state, with more than 332,000 net movers taking $29 billion to other states.
Wirepoints’ accompanying Illinois analysis includes a long-term look at out-migration from the state.
Illinois’ Deeper Losses
The Illinoisans who fled in 2020 earned, on average, $44,100 more than the residents Illinois gained from other states. Outgoing residents earned $118,000, while incoming residents made just $74,000. That’s the biggest gap since at least 2000, based on Wirepoints’ analysis of the IRS data.
So not only is Illinois losing people outright, but the people moving into Illinois make far less than those who are leaving.
The problem with Illinois’ chronic outflows is that one year’s losses don’t only affect the tax base the year they leave, but they also hurt all subsequent years. The losses pile up on top of each other, year after year. And when you lose income to other states for 20 straight years, the numbers add up.
In 2020 alone, Illinois would have had $76 billion more in AGI to tax had it not been for the state’s string of yearly losses in income.
Cumulative Losses
Illinois is chronically losing people and their wealth to other states as Illinoisans continue to vote with their feet.
It’s no wonder why. While politicians in other states work to keep their streets safe, to improve education and to lower taxes, the Illinois legislature shows no signs of pursuing education, criminal justice and pension reforms needed to make the state competitive. Expect the exodus to continue.
Escape Illinois: Get The Hell Out Now, We DID
On October 5, 2012 I commented Escape Illinois: Get The Hell Out Now, We Are
In a follow up post on July 10, 2020 I commented It Takes 3 Weeks to Escape Illinois
Why 3 weeks? That’s how long it takes to reserve a one-way U-Haul outbound.
We are very happy with our decision to move to Southern Utah.
There are lower tax states, but the national parks, state parks, high-speed fiber options, low crime rates, and a relatively close international airport make Southern Utah an outstanding choice for us.
Summers are way hotter than I like, but humidity is low, there are no pesky mosquitoes, and much cooler mountain temperatures are just a couple hours away.
This post originated at MishTalk.Com
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Mish
high-profile corporations left his state. “Countless companies are
choosing Illinois as their home,” Mr. Pritzker said. Then why does a new
Internal Revenue Service report show an accelerating taxpayer exodus
from Illinois and other high-tax states?”
Um, Jewish Florida (and ex-NY) Republican here. The canard that all those northerners moving in are bringing their blue voting habits with them is just that–a canard.
Republican voter registration in Florida surpassed that of the Dems for the first time ever at the end of 2021, and the gap has widened even further since then, to over 541,000 as of last report from the Florida Secretary of State’s Election Division. What you say may be true in other states, but it sure doesn’t look that way here. Even in Texas, polls showed that Ted Cruz performed better among newcomers than among Texas natives. We’re going through a Great Sort, and just starting.