California loses one taxpayer per minute, Florida gains

By Andrew Rice | The Center Square
The Center Square

(The Center Square) – Florida welcomes a new taxpayer about every two minutes while California loses one about every minute, according to new data.

An analysis of data from the IRS conducted by the National Taxpayers Union Foundation found that Florida, Texas and North Carolina gain new taxpayers faster than any other state in the country.

Florida gains a new taxpayer every 2 minutes and 9 seconds; Texas gains one every 2 minutes and 53 seconds; and North Carolina gains a new taxpayer every 6 minutes and 21 seconds.

Andrew Wilford, director of the Interstate Commerce Initiative at the National Taxpayers Union Foundation, said state policies are attracting people and generating revenue. He estimated Florida is collecting $4 billion more per year for its budget from people moving to the Sunshine State.

“Welcoming people moving from other states means more job creators, more innovators, and a larger tax base from the economic activity that they generate,” Wilford said.

“States like Florida and Texas attract people because they have no income tax, but also their ability to attract people means a stronger economy that can generate added revenue from sales, property, and business taxes.”

South Carolina and Tennessee follow close behind as they gain a new taxpayer every 7 minutes and 30 seconds and 8 minutes and 42 seconds, respectively

Wilford said he was not surprised to see Tennessee high on the list of states taxpayers migrate toward.

“The state has a good business climate and no income tax, and the data shows people like that,” Wilford said.

NTU calculated its data based on most recent IRS surveys of how many taxpayers move into and out of a state each year.

The states losing taxpayers most frequently are California, New York and Illinois. California loses a taxpayer every 1 minute and 44 seconds; New York loses a taxpayer every 2 minutes and 23 seconds; and Illinois loses a taxpayer every 6 minutes and 4 seconds.

Massachusetts lost a resident every 11 minutes and 38 seconds while New Jersey lost one every 14 minutes and 14 seconds.

States losing population have attempted to reduce income taxes to keep businesses and individuals in the state. Vermont, which gains a new resident every 6 days, attempted to cover moving expenses for people moving to the state.

In California, legislators are trying to ease zoning restrictions to make it easier for people to stay and incentivize more moves into the state.

In some states, the number of people entering and leaving is almost equal. In Mississippi, one person leaves every 13 hours, and in New Mexico, one leaves every 7 hours. Wilford said he needs to take a closer look at some of the data in these states to determine accuracy.

In New Mexico, population gains are largely driven by people ages 55 to 64 but the state is losing young people, Wilford said. Mississippi is gaining population from a wealthy tax bracket.

Wilford said the COVID-19 public health emergency also played a role in the dramatic shifts of state migration.

California saw a lost $9 billion in taxpayer funds during 2018, this number dramatically increased to $29 billion lost in 2020. On the other hand, Florida tax gains increased substantially, rising from $17 billion to $39 billion between 2018 and 2020.

“The pandemic and COVID policies accelerated a trend that was already happening,” Wilford said. “Many more Americans today are working remotely some of the time, and we see continued moves that reflect that.”