A recent report from Smart Asset suggests that the most significant departures of individuals with an annual income of $200,000 or more occurred in California and New York. At the same time, the most significant influx of these high earners was witnessed in Florida and Texas for the years 2020 and 2021.
Our analysis of the migration patterns of high-earning households encompassed data from all 50 states, including the District of Columbia. To identify these households, we set the criterion of adjusted gross incomes of $200,000 or more. We examined two critical metrics for our investigation:
The next metric showed an inflow of tax filers earning $200,000 and above. This metric reflects the number of tax filers with adjusted gross incomes of at least $200,000 who relocated to a particular state.
The outflow of tax filers earning $200,000 and above: On the other hand, this metric represents the count of tax filers with adjusted gross incomes of at least $200,000 who moved out of a state.
To rank the states, we computed each state’s net inflow of high-earning households, resulting from subtracting the outflow from the inflow.
Florida welcomed an estimated 27,500 wealthy individuals during this period, and Texas drew in around 9,000. Conversely, California saw 45,000 high-income individuals depart, with New York losing approximately 31,000.
Despite the cost-of-living complications, the population of high-income households in America is on an upward trend. The year 2021 saw 8.68 million tax returns reflecting an annual income of over $200,000—an increase from 8.57 million the previous year.
The migration patterns of these affluent households can heavily influence the state’s fiscal situation and tax structure.
The importance of New York, California, Florida, and Texas extends beyond the economy, as they are instrumental in U.S. presidential elections due to their substantial electoral votes, with 28, 54, 30, and 40 votes, respectively.
In addition to New York, there were significant departures from other Northeastern states such as Massachusetts, New Jersey, Pennsylvania, and Washington, D.C.
New York ranked number two nationwide for the most significant net migration of wealthy residents out of the state (19,795).
The states rounding out the top five with outflows of highest-earning households in 2021 were Illinois, Massachusetts, and New Jersey. Virginia, Maryland, and Minnesota followed.
While these states still maintain some of the United States’ highest percentage of wealthy households even though they had the most significant net outflows of high earners in 2021.
Those income earners making $200,000 or more annually make up 7.2 percent of the tax base of those states.
Besides Florida, other Southeastern states attracting high-income Americans include North and South Carolina, Tennessee, Georgia, Alabama, and Arkansas.
Finally, the fastest growth in the $200,000-plus tax bracket is in Idaho, Florida, and Montana.