California and New York lose billions in taxpayer income: IRS data

As Americans continue to move across state lines, California and New York remain at the center of the country's immigration story.

The latest IRS data shows that the top 10 counties with the largest net taxpayer losses to other states were located in California and New York. 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 changes 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.

The movement of taxpayers and their income can also affect state and local tax collections, which help fund schools, public safety and infrastructure.

Los Angeles County, home to Hollywood and one of the country's largest economic engines, led the nation with a net loss of 17,496 taxpayers. Those departing taxpayers took nearly $1.9 billion in revenue with them when they moved to other states.

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FLOURISHING MAP SHOWING COUNTY MIGRATION: 29696985

Other major counties in California and New York experienced similar outflows. The next largest losses for taxpayers were recorded in Queens County, New York (-17,109), the Bronx (-16,319), Orange County, California (-11,618), and Suffolk County, New York (-10,434).

One New York county stood out for a different reason.

Manhattan gained more interstate taxpayers than any other county in the country while losing nearly $1 billion in adjusted gross receipts, suggesting that many of the newcomers earned less than those who left.

Compiled from federal tax returns, IRS immigration data provides one of the clearest snapshots of where Americans are relocating and where their income is moving with them. Economists say the numbers offer insight into the economic forces that are reshaping states, from taxes and housing costs to job opportunities and the long-term health of local tax bases. The latest data continues to point to a shift away from many of the nation's largest coastal counties toward fast-growing destinations in the Sun Belt and Mountain West.

“It's very, very clear that ultimately people vote with their feet and when they feel like they're being taxed too much, they go somewhere else where they'll be taxed less,” Heritage Foundation chief economist EJ Antoni told Fox News Digital.

“If you look at where these people are going, they're not going to Massachusetts, Illinois or California,” Antoni 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 tax levels.”

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The remaining counties rounding out the top 10 for taxpayer losses were San Diego County, California (-9,401); Nassau County, New York (-9,130); Riverside County, California (-8,968); San Bernardino County, California (-8,462); and Kings County, New York (-6,924).

While those two states dominated the counties with the biggest losses for taxpayers, other parts of the country continued to attract new residents. The counties with the largest net gains in interstate taxpayers were Maricopa County, Arizona (+9,353); Harris County, Texas (+8,955); King County, Washington (+8,297); and Clark County, Nevada (+7,524).

“The 'vote with your feet' movement is real,” Paul Teller, a conservative strategist who previously served in the Trump-Pence White House, told Fox News Digital.

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Teller said Americans continue to leave high-tax, highly regulated states for places where they can keep more of what they earn and face lower costs of living, arguing that migration patterns should serve as a warning to policymakers in states that continue to lose residents.

“What baffles me, especially as a former New Yorker, is that there doesn't seem to be a lot of concern in the states about losing people,” Teller told Fox News Digital.

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Manhattan attracted the most new taxpayers in the country between 2022 and 2023, but still saw a sharp decline in reported income as wealthy residents left. (Spencer Platt/Getty Images)

Teller argued that the trend could have long-term fiscal consequences if wealthy taxpayers continue to leave. He said the debate has gained renewed attention as New York City Mayor Zohran Mamdani advances an agenda that includes higher taxes on higher earners, rent freezes for stabilized apartments, free city buses and city-owned grocery stores.

California has also remained at the center of debates over taxes on high-income earners, maintaining one of the highest marginal tax rates in the country.

“Let's see what happens when the rich keep leaving the big blue states like California and New York,” Teller said. “We'll see what happens with tax revenue. We're already seeing it. It's declining significantly.”