By: Ted Dabrowski and John Klingner
Every year, states across the country compete with each other for people and their wealth as millions of Americans move between states. The stakes are large. A growing population for the winners means an increasing tax base, economic growth and investment. For the biggest losers, it means more difficulties in paying down debts, higher taxes and fewer investments for the future.
The nation’s most-recent winners of migration from other states are Florida and Idaho according to the latest migration data released by the IRS. Florida, the nation’s perennial winner, gained the most people and income overall in 2020, while Idaho gained the most of both on a percentage basis.
On the other end of the competition are states that have become perennial losers. States like California, New York, Illinois and New Jersey once again experienced some of the nation’s biggest losses of both residents and their money.
Those findings are based on a Wirepoints’ analysis of the latest 2020 domestic migration data provided by the Internal Revenue Service. The IRS reviews tax returns annually to track when and where people move. It also aggregates the ages, income brackets and adjusted gross incomes of filers.
Winners and losers
The Sunshine State attracted over $41.1 billion in Adjusted Gross Income (AGI) from 624,000 new residents (tax filers and their dependents) that moved into Florida in 2020. On the flip side, Florida lost $17.4 billion in AGI from 457,000 people who left. Overall, Florida came out ahead with 167,000 net new people and $23.7 billion in net new taxable income.
That’s a total gain of about 3.3 percent of the state’s total 2019 AGI ($711 billion).
Texas was the runner up with a net income gain of $6.3 billion, followed by Arizona with $4.8 billion. North and South Carolina rounded out the top five with net gains of $3.8 billion and $3.6 billion, respectively.
On the losing side, New York suffered the worst outflow of money of any state in 2020. The Empire State lost a net $19.5 billion in income, or 2.5 percent of its 2019 AGI, while a net of nearly 250,000 residents moved out.
California was next, losing a net $17.8 billion and 263,000 people. Illinois was third with a net loss of $8.5 billion and 101,000 people. Massachusetts and New Jersey were in 4th and 5th place, with $2.6 and $2.3 billion in income losses, respectively.
Tables with each state’s ranking in migration gains/losses are provided below.
The cumulative impact of income losses and gains
The problem with chronic outflows, like in the case of New York, is that one year’s losses don’t only affect the tax base the year they leave, but they also hurt all subsequent years. The losses pile up on top of each other, year after year. And when a state loses income to other states for 21 straight years, the numbers add up.
In 2020 alone, New York would have had nearly $123 billion more in AGI to tax had it not been for the state’s string of yearly migration losses. And when the state’s AGI losses are accumulated from 2000 to 2020, it totals $1.0 trillion in cumulative lost income that could have been taxed over the entire period.
The opposite is true for migration winners like Florida. Gains in people and income pile on top of each other each year, building an ever-growing tax base. In 2020 alone, the state’s tax base was some $197 billion higher due to the 20-year string of positive income gains from net in-migration.
Even though Florida doesn’t tax incomes, Wirepoints also added up Florida’s cumulative AGI to make an apples-to-apples comparison with New York. When the Sunshine State’s AGI gains are accumulated from 2000 to 2020, it totals $1.6 trillion in income that could have been taxed over the entire period.
The competition for people matters
Illinois, one of the nation's other big losers, shows just how damaging being an “exit” state can be – especially when a state starts to lose its wealthier residents and and they are only partially replaced by people who make less. The Illinoisans who fled in 2020 earned, on average, $30,600 more than the residents Illinois gained from other states. That’s the biggest gap since at least 2000, based on Wirepoints’ analysis of the IRS data.
Based on a percentage of total income, Illinois ranked 2nd-worst nationally for income losses in 2020. Illinois lost 1.9 percent of its 2019 AGI. New York and Alaska ranked 1st and 3rd, with losses of 2.5 percent and 1.3 percent of their 2019 total incomes, respectively.
In contrast, Idaho was the nation’s big winner on a percentage basis in 2020, gaining 4.2 percent of its 2019 AGI base. The nation’s top five were rounded out by Wyoming, Montana, Florida and South Carolina.
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Florida’s gains and Illinois’ losses are a clear reminder that states are constantly competing for people, businesses and a growing tax base.
The prize for winning is big, but the price for losing may be even bigger.
Read more from Wirepoints:
- Bleeding people: New IRS migration data shows Illinois lost another 100,000 residents and a record amount of wealth in 2020
- A statistic that continues to be ignored: The high rate of births to unmarried mothers across Illinois’ 20 largest cities
- False advertising of Illinois’ new ‘property tax relief’ bill
- About that U.S. Census “undercount”: Illinois’ population is still just 12.8 million
- 2021 Census numbers are horrible for Illinois: Population decline second worst in country, behind only New York
Appendix
The greater problem that few people seem to be addressing is that wealth out-migration at the national level is skyrocketing. The IRS tracks formal renunciations of the wealthiest of taxpayers, every quarter. The threshold to be on the list goes up each year. But in general, the people whose names are on those lists are easily among the to 0.5% (half percent) of U.S. citizens and permanent residents. In the last year that George W. Bush was in office, the names of only 231 rich people were on the four quarterly lists for the year. The highest it had ever… Read more »
There’s a reason retirees from IL government jobs are moving to Florida and Texas, and that’s because taxes are too high in Illinois. Retirees have said so.
Anecdote, the area that we’re building a new home in FL is constructing a new high school. The first in 19 years in the county.
By the time it’s complete it will already be paid for. No tax increase or borrowing attached.
FL baby.
We redomiciled to FL last year and northern blue states have no idea the pain coming their way as millions of people realize how great red state life is.
Yes, for people who have a life and lifestyle similar to yours I presume will find lots of agreement. For others who have differen kinds of labels that’s likely not so great. MAGA in principle works well for some but not so much for others. We are a country with great differences in beliefs and values, making laws that benefit some come at a cost not confined to dollars.
Freedom works for everyone.
Especially if you want to work or have worked for decades to create the comfort that you enjoy…..
MAGA in principle works well for some but not so much for others.
So who doesn’t “Making America Great Again” work for? It seems it would only be natural that a country with a great economy and great opportunities would work for just about everyone. So well, in fact, that people are tripping all over themselves to come here, legally or illegally.
What a ridiculously stupid comment.
You must be the one behind the all the drag and tranny ads I see on the media all time time now – streaming, TV or otherwise. Get a life James, or seek truth, or both. This is ridiculous. Your “lifestyle” nonsense is what ruined America and is still trying to keep up the degradation.
“differen kinds of labels” = moochers and losers
And degenerates. The modern left that is in control has a huge element that should be called that.
Rush favorite word for them was reprobates.
A number of down votes without any commentary as to why. Looks like Rich Miller let the CrapFax kids out of the playpen again. Hope the one guy finally got out of mom’s basement.
My wife is interested in ‘The Villages’ – any experiences?
Read the book “Leisureville” by Andrew Blechman or a NY Post article entitled “Romance and STDs: Inside Florida’s Wild Retirees Getaway.” The place has a reputation, some mythical, some earned.
It’s been debunked as ‘fake news’
Much but not all. We own a medical building there. The stories. . .
It is a city.
Specific problems/specific solutions: Property values in any region in America can be predicated on simple math: Annual cost-of-carry (determined according to: interest rates, liability insurance, and property tax rates) on property in “mean” or “median” America is $X%. Florida, Indiana, Tennessee is $X%. Illinois is 300%$X%-400%$X%. Property values here have cratered relative to America in the past 30 years. Property values will predictably crater more, to bankruptcy-fire-sale levels. At that time, insider political class will be given access to highly leveraged loans (from public institutions backed by taxpayer guarantees) to purchase ownership on most Illinois real estate, during dead-of-the-afternoon closed-meeting… Read more »
Huh?
Gold. Susan has nailed the process. It is not obvious to most because it happens/has happened, as she describes, over decades. Cost-of-carry is just another way of confiscating equity, and as she describes, it will eventually be transferred to new owners once reset. So how do you protect yourself from this cycle, long term? Not easy, but maybe starts with shopping amongst states with a strongly embedded conservative culture. Of course, that isn’t enough if they aren’t able to compete economically over time. Were I a young couple, that route strikes me as more likely to bear fruit than betting… Read more »
Florida was on my short list before I moved from the Chicago subs to Tennessee. Below is the scenario I used when evaluating where to live. There are 2 homes of equal value, one in Illinois and one in Tennessee. The tax on the Illinois home is $7,500 while the tax on the Tennessee home is $2,000. Due to inflation, assume taxes go up 100% on both homes over the next 20 years. A fair assumption is that the Illinois home would struggle to appreciate during the 20 years while the Tennessee home would be in high demand. The numbers… Read more »
there is a simple math formula: Tax Rate Capitalization: As a function of the “Norm” (that is, the property tax rate of what most communities in America take in property taxes in order to supply the standard of social service provision (schools, roads, fire&rescue, government, etc.) which represent “the means of the taxed community” being supplied…so if your community is taxed 3.6% (as in Woodstock IL), home values will depreciate annually at the Rate Differential relative to all over America which supplies The Norm social service provision for the Norm Tax Rate. America mean/median property tax rate is ~1%, Woodstock… Read more »
Makes sense. Thanks Susan.
This calculation made sense a few years ago because the same priced home in TN was a better value than the home in IL. i.e. bigger house, more land, better location. These days, the TN home is not such a good value compared to IL. The TN, and nationwide really, housing bubble has jacked up prices so much that the real estate tax and income tax savings don’t justify the higher priced home, which by the way, you’re now paying with a 5%+ mortgage instead of a 3% mortgage three or five years ago. This will however correct itself when… Read more »
I believe you are incorrect, that it is always a horrible relative investment. Two ways people lose thousands of dollars per year here vs. those regions which spend appropriately to the means of their taxed communities. One is in accrued home price devaluation. The other is the nominal cost and missed opportunity cost of the relatively higher p-tax rates which are demanded here in return for nothing of relative value (TN provides schools with similar standardized test results, and police and government and roads too). Any priced home in Illinois will lose value relative to a similar priced home in… Read more »
https://www.redfin.com/TN/Franklin/511-Kilburn-Ct-37067/home/87897150
This beautiful 3,200 sq foot home, 4 bed / 3.5 bath home sold for $530,000 in March of 2019. Taxes are $3,400.00.
This house is again pre-listed for $850,000.
Redfin rates this area as a 91/100 for competitiveness.
This is huge red flag sign of a massive housing bubble.
https://www.redfin.com/IL/Woodstock/1304-Club-Rd-60098/home/17832648 This is a $550k house sold a few months ago in Woodstock. Same size house, similar sq ft, similar lot. Taxes $13,000. So it’s a 9k a year savings in taxes to move to TN. But you’re paying $350,000 more for the house. Plus 5.5% interest on the note. Like I said, wait a year or two more, for this housing bubble to burst, and the move out of state will again make sense financially. Politically, our situation is untenable. but I’m not going to bankrupt my future to buy an overpriced house to avoid JB’s ridiculous policies. I… Read more »
Let’s do the math: (I am using YOUR data from comments which data are skewed toward YOUR arguments, so you cannot say that “the math is wrong”). 5.5% 30 year mortgage on: $550k loan= $3206 monthly. $850k loan= $5110 monthly. Property taxes on $550 home= $1083 monthly Property taxes on $850k home= $283 monthly So on this house-to-house comparison, $800 extra P-Tax per month times 12 months = $9600 per year ADDITIONAL cost to live in the $550k house rather than the $850k house. Mortgage payment differential= $1904 extra mortgage payment per month times 12 months= $22848 per year cost… Read more »
If you pick the right established area in the South, your taxes will not increase yearly like they always do in Illinois. My property taxes in NC have gone up $7 since I bought in 2019. Counting the previous owner, taxes are up $45 since 2016 on my house.
Even those states contiguous and near-neighbors to Illinois – Wisconsin, Iowa, Michigan, Indiana, Missouri, and Kentucky – that are said to be doing better, nevertheless show a loss in AGI, however, slight it may be. More but less prosperous residents.
But the contiguous states are SOLVENT. Illinois is not.
The forced globalization of the last 25 years caused worker migration out of the ‘rust belt’ looking for work.
While at the same time inbound migration from central and latin america replacing the residents who used to live there.
The inbound migration represents far less in earning power – and a big drain on state resources.
This sanctuary state garbage must end.
Head south and directly pass these refugees because they cannot afford their countries while their countries embrace expat $$$. They will inevitably replace us here. Simon Bolivar was a product of the Enlightenment as Jefferson was. I am thinking this version of economics will be more sustainable for longer term retirement with renouncing citizenship when ready. Everything points to a slow toxic corrosive decline. Ever notice any mention of the Spanish or Portuguese cultural appropriation? That’s because they have families and a tangible values system based on religion. No I am not talking about the narco state directly to our… Read more »
Democrats encourage illegal immigrants to come here because Democrats believe the immigrants and their children will eventually vote Democrat. The monkey wrench in this plan is the globohomo agenda and the cult of LGBTQ+ is a serious impediment to the immigrants conversion to the Democrat party. Latin American culture is viscerally repulsed by the globohomo and is reflected in the polls with latin americas leaving the Democrat party in droves. But not enough of them have left the Democrats for Republicans yet, as Democrats control the education system, and use it to indoctrinate immigrant children into the globohomo cult, but… Read more »
https://www.wsj.com/articles/hispanic-voters-now-evenly-split-between-parties-wsj-poll-finds-11638972769?mod=djemalertNEWS
We can only hope the political ramifications are dire and continue for generations to come.
Illinois residents have a massive L on their foreheads.
LOSERS!
I am afraid that the country may await a similar fate. Just will take longer and when that happens the civil war will be in full swing. Only thing holding that back is 2A.
Just like public employee pensions getting annual 3% increases compounds over time creating a huge windfall, so does the migration of wealth to other states over the years. More and more people vote with their feet.
Pritzker and Democrats have long argued that the mostly illiterate, uneducated illegal aliens being ‘welcomed’ into Illinois will be a huge economic boost as they receive public aid and look for menial work. Enjoy IL – you asked for it.
Who is the reader that posted a negative on each of these posts? Some political hack? Explain or defend your disagreement with the posts. The postings ask reasonable questions that deserve discussion.
Paid troll and troll farms of the deep state, democraps, and enemies is freedom.
Rich Miller.
Perhaps JB or one of his lackeys
Wally, Wally, Wally … you sound like a conservative.
Ask a reasonable question, get a reasonable answer? That is not the “way of the Troll.” It’s more the “Chicago Way.”
I find the articles and discussions on this site to be illuminating and thought provoking.
Thank you, Wirepoints!
I have serious doubts about the average income of the inbound migrant to IL. No way the average non-English speaking migrant earns $75k a year. I can’t name even one suburb that has gentrified but I can name a dozen or more that have gone down a full standard deviation in income. Drove through Round Lake Beach this past weekend coming home from a camping trip. What a, in Trump’s word’s, a $hitole. Mostly new migrants. I doubt an entire block earns $75k a year combined.
After you factor in that these non-citizens get free education for their kids, free health care, food stamps, welfare, ect. ect. and cash payments for work not paying income taxes, than yeah i could see some pushing over $75k.
H-1B visas?
The tables suggest an average 2020 incoming AGI was $44,209 while the average 2020 outgoing AGI was $58,881. The difference, or $14,673, times net outmigration of 100,921 people, suggests an AGI loss of nearly $1.5B in 2020 alone. Apply the IL income tax rate of 4.95% (ignoring personal exemptions) and IL lost over $73M of tax revenue. That is compounded year after year. And each year of net outmigration is added on top. Before you know it, it’s real money! Solution? Raise taxes, of course! Don’t reverse mismanagement, diminish corruption, regulations and crime, reform pensions or shrink government. Count me… Read more »
The irony is that they want you to leave and they encourage illegal immigrants to sanctuary in IL instead. Dems honestly believe that immigration is a net benefit for the state but ONLY if they don’t have to live in those places where the immigrants settle. Ask african-americans how they feel about hispanics moving into and taking over their neighborhoods.
It will be very interesting to see what happens after midterm elections where state governments were up for election. For example, my new home state of Nevada is predicting a red wave. Right now, it looks like Illinois when it comes to state government. States really worth watching are border states with Illinois that are run by Democrats, or have a lot of historical Democratic policies. Michigan and Wisconsin come to mind. If Wisco goes 0% income tax, look for a sucking sound at their Minnesota and Illinois border.
Wisconsin seems to be doing well as-is. I’m surprised they’re considering exchanging the state income tax for a hike to 8% in the sales tax rate. They have the best funded pension system in the country and are surrounded by higher tax states. If I was Wisconsin, I’d leave well-enough alone.
I wish a reporter would ask J.B. Pritzker, who lies as badly and often as Biden, about the outmigration of 100,000 of Illinois people, most who are taxpayers, who have left the state for greener and more lucrative pastures elsewhere.
Yes, he should specifically be asked what the AGI numbers are
he’d be confused with BMI and would say it’s private.
Pritzker doesn’t answer questions, especially this kind of question.
He obfuscates with the best of ’em and spends tax money to “buy” votes.
Hopefully the citizens of IL send a very strong message in November – we can only hope.
Pritzker has never once sat down to a reasonably touch interview where questions are followed up. He succeeds instead because of his massive budget for pushing out sound bite ads and a compliant press.
New York, California and Illinois. Gee whiz, what is it about those states that makes people want to leave? If only there was a common attribute or two. This will be one analysis you won’t hear King Pritzker talking about. He ignores fact based reporting that doesn’t paint him in a positive light.