A new analysis has found that in recent years, the tax bases of New York and New Jersey have suffered losses of billions of dollars due to a large outflow of residents.
The conservative advocacy group and think tank “Unleash Prosperity” released a report on Tuesday (November 11), based on data from the Census Bureau and IRS, showing that from 2013 to 2022, New York lost $517.5 billion in resident tax revenue, while New Jersey lost $170.1 billion during the same period.
The report covers the cumulative changes in residents’ income across states, as movers tend to transfer their income to a new state, a trend that can last for several years beyond the initial move.
Economist and co-founder of “Unleash Prosperity”, Steve Moore, stated in an interview with Fox Business Channel, “Residents leaving New York and New Jersey have led to a combined loss of two-thirds of a trillion dollars in tax revenues and purchasing power over the past decade.”
Moore added, “This is one of the largest wealth losses suffered by a single region in American history, with New Jersey and New York being drained by low-tax states in the South.”
New York ranks at the top in losses among states, while New Jersey ranks fourth in terms of losses. The states that rank second and third in losses are California (losing $370.1 billion) and Illinois (losing $315.2 billion).
Meanwhile, during the period from 2013 to 2022, the state with the largest increase in resident tax revenue was Florida, growing by over $1 trillion, followed by Texas with an increase of $290 billion.
The “Vote With Your Feet” survey by “Unleash Prosperity” tracks the movement of Americans and their funds among states annually, revealing that these states experiencing the largest increases and decreases in funds in recent years.
According to tax filing data from 2011–12 to 2021–22, New York lost 1.757 million residents due to domestic migration, California lost 1.632 million people, Illinois lost 881,012 people, and New Jersey lost 350,111 people.
During this period, the states with the highest population growth were Florida (growing by 1.591 million) and Texas (growing by 1.268 million), more than double the growth of the third-ranked North Carolina (increasing by 520,615 during the same period).
On July 31, WPRO reported that the top 10 states with the most significant net population inflow were Florida, Texas, Tennessee, North Carolina, South Carolina, Arizona, Georgia, Idaho, Nevada, and Utah. The top 10 states with the most severe population and income losses were California, New York, Illinois, New Jersey, Massachusetts, Pennsylvania, Michigan, Maryland, Minnesota, and Oregon.
In the recent decade of population migration, Florida and Texas emerged as the biggest beneficiaries.
The lower tax burden is often a significant driver of the trend of population moving from blue states to red states. States like California, New York, and Illinois often have some of the highest tax rates in the country, while Republican-majority states tend to have lower or no income taxes and a business-friendly environment.
Another influencing factor is the cost of living, particularly housing affordability. In red states, families can often buy a house twice the size at half the price compared to blue states. Additionally, red states typically have lower crime rates and greater school choice.
(Reference: Fox Business News)