California and New York losing billions in taxpayer revenue: IRS data

Key Points:

• IRS data reveals that the top 10 counties with the largest net losses of taxpayers to other states are all in California and New York, highlighting significant migration away from these high-tax coastal areas.
• Los Angeles County led with a net loss of 17,496 tax filers, who took nearly $1.9 billion in income with them, followed by major counties in New York such as Queens and the Bronx experiencing similar outflows.
• Manhattan was unique in gaining more interstate tax filers than any other county but simultaneously losing nearly $1 billion in adjusted gross income, indicating newcomers tend to earn less than those leaving.
• Migration trends show a clear shift toward Sun Belt and Mountain West states like Texas, Florida, Arizona, and Nevada, which offer lower or no income taxes and reduced living costs, attracting residents from high-tax states.
• Experts warn that continued outflows of affluent taxpayers from states like New York and California could have long-term fiscal impacts on state economies and public services, amid ongoing debates over tax policies targeting high earners.