IRS migration data show the nation’s 10 largest county-level taxpayer losses were concentrated in California and New York, shifting income toward states such as Texas, Tennessee, Florida and South Carolina.
By yourNEWS Media Newsroom
California and New York are losing thousands of taxpayers and billions of dollars in adjusted gross income as residents relocate to states offering lower taxes, greater affordability and different economic opportunities, according to a report based on the latest Internal Revenue Service data.
The 10 U.S. counties with the largest net losses of taxpayers to other states were all located in California or New York, according to figures highlighted by Fox News.
Compiled from federal tax returns, the data track where taxpayers move and how much income leaves or enters a county with them. Economists said the results provide a detailed view of population migration and its broader effects on state tax collections, housing markets and economic growth.
“The latest IRS data show the top 10 counties with the largest net losses of taxpayers to other states were all located in California and New York,” the report stated. “Compiled from federal tax returns, the figures offer one of the clearest snapshots of where Americans are relocating — and where their income is moving with them. Economists say those migration patterns help explain broader shifts in state economies, tax bases, and housing markets as families weigh affordability, taxes, and job opportunities when considering where they want to put down roots.”
Los Angeles County recorded a net loss of 17,496 tax filers, who took more than $1 billion in income with them when they moved elsewhere.
Queens County in New York lost 17,109 taxpayers, further reducing the local tax base in one of New York City’s most populous boroughs.
The migration carries consequences beyond the number of residents leaving. When taxpayers relocate, their income and future tax payments generally move with them, potentially reducing the revenue available for schools, law enforcement, transportation, infrastructure and other public services.
The data also revealed a more complicated picture in Manhattan.
Although Manhattan attracted more interstate tax filers than any other county in the United States, the borough still lost nearly $1 billion in adjusted gross income.
“Manhattan gained more interstate tax filers than any other county in the nation while simultaneously losing nearly $1 billion in adjusted gross income, suggesting many of the newcomers earned less than those who left,” the outlet reported.
The finding indicates that the number of arrivals alone does not determine the financial effect of migration. A county can gain taxpayers while still losing taxable income when higher earners depart and are replaced by residents earning less.
New York City’s political direction has added to concerns about whether wealthy residents and business owners will continue leaving.
More than 26% of city residents said they were considering moving if Democrat Zohran Mamdani won the mayoral election.
Mamdani ultimately became mayor, placing New York state leaders under additional pressure to discourage billionaires and other high-income taxpayers from leaving the city in response to his socialist policy agenda.
The loss of even a relatively small number of wealthy residents can have an outsized effect on public revenue because high earners contribute a significant share of state and local income tax collections.
California faces similar challenges as residents cite high housing costs, taxes and the overall expense of living when deciding whether to relocate.
Heritage Foundation chief economist E.J. Antoni said the migration patterns demonstrate that Americans use relocation to express their preferences about taxation and government policy.
People “vote with their feet,” Antoni told Fox News.
“If you look at where these people are going, they’re not going to Massachusetts or Illinois or California,” he said. “They’re going to Texas. They’re going to Tennessee. They’re going to Florida — places with low or no income taxes and low overall levels of taxation.”
Texas, Tennessee and Florida have attracted residents from higher-tax states while promoting lower tax burdens and business-friendly economic policies.
South Carolina has also experienced substantial growth, adding to the broader movement toward states in the South and Southeast.
The migration is reshaping economic activity across the country as income, consumer spending and housing demand move from traditional population centers in California and New York to faster-growing states.
Receiving states may benefit from increased tax revenue, property demand, business formation and workforce growth. At the same time, rapid population increases can place pressure on housing, roads, schools and public services.
For California and New York, sustained outmigration may create a difficult fiscal cycle. As taxpayers and income leave, state and local governments may face weaker revenue growth while still needing to maintain services and infrastructure for remaining residents.
Officials could respond by reducing spending, restructuring services or placing a larger tax burden on taxpayers who remain, potentially encouraging further departures.
The IRS figures show that residents are not simply moving between neighboring counties. Many are crossing state lines and taking substantial amounts of taxable income to jurisdictions with lower or no state income taxes.
The losses in Los Angeles County, Queens and Manhattan illustrate how population movement can affect communities differently. Los Angeles and Queens lost large numbers of tax filers, while Manhattan gained filers but still suffered a major income decline because the residents leaving earned more than those arriving.
Together, the findings point to a broader redistribution of taxpayers and wealth away from California and New York and toward states including Texas, Tennessee, Florida and South Carolina.
As families and businesses continue weighing taxes, housing affordability, employment and quality of life, the movement of residents may further alter state economies, political influence and the distribution of public revenue across the country.
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