Rich People Have Fled High-Tax States for the Sun Belt

Wealthy people in the U.S. have scooted to where the sun shines, according to CNBC Make It.

The outlet referenced a Smart Asset analysis published in early August that shows where higher-income households moved between 2019 to 2020, using tax filing forms.

Where are wealthy people moving?

This might not shock you, but Florida was high on the list.

“No state is gaining more high-earning households than Florida, and it’s not even close,” Smart Asset wrote.

Smart asset defined “high income” as having an adjusted gross income of $200,000 or more. It calculated the inflow and outflow of these wealthy tax filers from 2019 to 2020 and then subtracted outflow from inflow, resulting in a “net migration” figure for each state.

Florida gained a net 20,263 tax filers with over $200,000 in income in 2020, pretty substantially outpacing the next state, Texas, which saw 18,417 new filings.

Here’s the top 10 as far as net migration of wealthy people, per Smart Asset’s analysis:

  • Florida +20,263
  • Texas +18,417
  • Arizona +5,268
  • North Carolina +4,713
  • South Carolina 3,967
  • Tennessee +2,743
  • Colorado +2,624
  • Nevada +2,331
  • Idaho +2,055
  • Utah +1,503

Why are wealthy people moving there?

As Smart Asset notes, many of these states do not have income taxes. There are nine states with no state income tax, it added, and four of them are in the top 10 list.

Further, it could be a weather-related decision. Smart Asset noted that eight of the top 10 are at the least somewhat located in the Sun Belt, a sunny swath of the southern U.S.

Where are wealthy people leaving?

Many of the states that ranked high on losing big earners were “traditionally viewed as high-tax states,” Smart Asset said (even though the states overall still have a fairly high concentration of wealthier households).

Here are the top 10 for net loss of high-income earners:

  • New York -19,912
  • California -19,229
  • Illinois -8,044
  • Massachusetts -2,116
  • Virginia -2,099
  • New Jersey -1,833
  • Maryland -1,828
  • District of Columbia -1,730
  • Minnesota -952
  • Ohio -889

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