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The Great Wealth Migration: The Flow of High-Income Earners Across States.

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The Great Wealth Migration: The Flow of High-Income Earners Across States.

Published: 07-18-23

High-income earners are moving, and the data on where exactly they’re going provides eye-opening insights into the current lifestyle trends of the wealthy. In this analysis, we dive into the intriguing dynamics of wealth migration within the United States, shedding light on the states attracting high-income earners and witnessing an outflow of such wealth.

We’ve ranked U.S. states based on their net income migration, a critical economic indicator reflecting the movement of high-income earners. This measure culminates several factors, including tax laws, economic prospects, and lifestyle offerings, that collectively sway where high-income earners reside.

States With the Largest Net Positive Tax Income Migration

Here are the states with the most significant net positive inflow of wealth ranked.

RankingStateNet Income Migration
1Florida$12.4 billion
2Texas$10.7 billion
3Arizona$9.4 billion
4Colorado$8.6 billion
5North Carolina$7.8 billion
6South Carolina$7.2 billion
7Tennessee$6.9 billion
8Utah$6.7 billion
9Georgia$6.6 billion

Next, let’s look at wealth migration on a state-by-state level.

State-by-State Migration: The Top Three Net Earners

Many high-income earners have recently relocated to these three states.

#1 – Florida: A Surge in Net Income Migration

Over the past year, the economic spotlight has focused on Florida as it leads the nation in net income migration. High-income earners are increasingly choosing the Sunshine State, reflecting an age-old economic axiom: Money goes where it is treated best.

Florida’s appeal to high-income earners is increasingly palpable. It stands out even among low-tax states like Texas, underlining its compelling attributes. The state’s financial landscape, myriad growth prospects, and debtor protections present a lucrative proposition for individuals and families with substantial income and assets.

#2 – Texas: Not Far Behind

Texas emerges as a star player in tax income migration, securing the second position among states with the highest positive net income migration. With a whopping $10.7 billion net gain, Texas is a favored destination for high-income earners seeking financial prosperity and tax advantages.

Various unique benefits draw these high net-worth individuals to the Lone Star State. Texas, like Florida, also boasts the absence of personal income tax, a significant lure for those with hefty incomes.

#3 – Arizona: Almost Hits 10 Billion Net Positive Tax Migration

Occupying the third position in the list of states with the highest positive net income migration, Arizona boasts an impressive $9.4 billion net gain. The state’s unique combination of beneficial tax structures, thriving business environment, and appealing lifestyle make it an attractive destination for high-income earners.

These fiscal advantages, the state’s sun-bathed landscape, and burgeoning opportunities propel the real estate market and stimulate business expansion. As wealth continues to flow into Arizona, the state enjoys a complete cycle of growth and prosperity.

This trend showcases Arizona as a beacon for those seeking financial and lifestyle enhancements in a state offering a compelling blend of the two.

State-by-State Migration: The Top 3 Net Losers

Conversely, these three states are currently seeing the worst net negative tax income migration.

#1 – California

California ranks first among states experiencing the worst net negative tax income migration. With a staggering net loss of $343.2 million, the Golden State is witnessing an outflow of high-income earners.

Despite its numerous attractions, from the booming tech industry and world-class universities to beautiful landscapes and cultural richness, California’s high personal income tax rates seem discouraging for many high-wealth individuals. This, coupled with the state’s high cost of living, will likely fuel a wealth migration out of California.

These trends affect the state’s economy, especially the real estate and job markets. The departure of high-income earners can decrease demand for luxury real estate and potentially affect the commercial real estate sector. It also impacts job creation, as these high-income individuals often play a significant role in business expansion and entrepreneurial activities.

#2 – New York

In the landscape of tax income migration, New York finds itself challenging, ranking second among states with the highest net negative income migration. With a net loss of $299.6 million, New York is experiencing a significant outflow of high-income earners.

Despite being an economic powerhouse and cultural hub, New York’s high personal income tax rates and substantial cost of living are significant deterrents for wealthier residents. These factors push high-wealth individuals to seek more financially favorable environments.

#3 – Illinois

As the third state witnessing the worst net negative tax income migration, Illinois is undergoing a significant financial outflow. The state has experienced a net loss of $141.7 million, indicating a trend of high-income earners seeking more tax-favorable environments.

While Illinois is home to a rich cultural scene and a diversified economy, its high tax rates and substantial cost of living present challenges for wealth retention. This financial pressure prompts an exodus of high-wealth individuals seeking better economic landscapes.

This departure of wealth can impact various sectors of Illinois’s economy, notably the real estate and job markets. With high-income earners leaving the state, there could be decreased demand for luxury housing and commercial real estate. Furthermore, this outflow could hinder job creation since high-wealth individuals often drive business expansion and innovation.

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