The trend of wealthy Americans fleeing high-tax states is continuing, with New York City taking a significant hit. Manhattan, in particular, led the nation in new tax filers between 2022 and 2023 but still lost approximately $922 million in adjusted gross income as high-income taxpayers departed.
The migration of high-income taxpayers is becoming a pressing issue for governors and state lawmakers, especially with the 2026 midterm elections approaching. Wealthy households contribute a disproportionate share of income tax revenue in states with progressive tax systems, making the size and composition of a state's tax base critical to funding public services.
The latest data from the IRS offers a clear measure of which tax policies are winning and which states are losing valuable tax dollars. Other parts of New York City and its surrounding suburbs also experienced significant outflows, with Queens County losing 17,109 tax filers to interstate migration and the Bronx losing 16,319.
These counties ranked among the top 10 with the biggest outflows, underscoring the continued exodus from some of the nation's highest-taxed and most expensive states. Many of the taxpayers leaving New York have relocated to lower-tax states such as Florida and Texas, which have been among the biggest beneficiaries of interstate migration in recent years.
Experts say the migration carries significant implications for state finances, with high-income earners accounting for a disproportionate share of state income tax collections. The loss of relatively few wealthy households can have an outsized effect on government revenues, making retaining wealthy residents a crucial priority for states that rely heavily on top earners for tax revenue.
According to economists, taxpayers are consistently choosing lower-tax states over higher-tax alternatives. "They're not going to Massachusetts or Illinois or California," one expert 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 levels of taxation."
