New York, California Lead Nation In Tax Revenue Loss

A recent survey found that Democratic Party-controlled states such as Florida and New York led the nation in loss of tax revenue due to domestic migration. Furthermore, while the heavily-Democratic states have led the nation in revenue and resident loss, states governed by Republicans have generally faced the opposite.

A survey of IRS data found that the Golden State suffered a loss of $340 million in tax revenue in 2021. The state also faced more than almost 700,000 residents leaving from the start of 2020 to July 2020. California had the lowest demand for U-Haul trucks coming in from other states.

The loss of tax revenue for California was the worst in the nation.

New York suffered the second-worst tax drop. The Empire State saw almost $300 million in tax revenue lost by residents leaving the state. 

Furthermore, other states traditionally administered by Democrats have faced a sharp decline in tax revenue due to migration, including Illinois, New Jersey and Massachusetts. 

On the opposite side, states that are or recently were administered by Republicans saw the highest increase in tax revenue. 

Florida had the sharpest increase, seeing its tax revenue increase by $12.4 billion. Texas came in second, adding almost $11 billion in new funds. Arizona, which had a Republican governor at the time, added another $9.4 billion in tax revenue.

When viewing the loss of gross income due to migration, the changes appear starker. IRS data shows that California lost almost $30 billion in residents’ collective income in 2021. This followed an $18 billion loss in 2020. 

New York lost $25 billion in 2021 and another $20 billion in 2020. 

Florida emerged as a major winner during that period, having added $39 billion in new residents’ income in 2021 and $28 billion in 2020. IRS data shows that a third of the new income added to the Sunshine State’s economy came from New York. 

Furthermore, Texas added $11 billion of new income, with almost half of it coming from former residents of California.

Both New York and California have faced a sharp increase in crime since 2020. In addition, both states levy among the highest tax rates in the union.

Both states lost seats in Congress following the 2020 census, with the Golden State losing representation for the first time in its history.