New York Is Getting Poorer as Wealthy Americans Flee High-Tax States, IRS Data Shows

Wealthy Americans are increasingly relocating from states with high taxes to those with lower or no income taxes, creating significant challenges for places like New York and California. According to IRS figures on interstate migration between 2022 and 2023, every one of the ten counties that experienced the largest net losses in tax filers was located in either New York or California.

In New York, the impacts stand out clearly. Queens County saw a net loss of 17,109 tax filers during this period—the second-highest drop in the nation. The Bronx lost 16,319 tax filers. Other New York counties, including Suffolk and Nassau, also ranked among the areas with major outflows of taxpayers.

Manhattan presents a striking example of the trend. The borough attracted more new tax filers than any other county in the country. Despite this, it still recorded one of the largest declines in adjusted gross income nationwide—roughly $922 million—because many higher-earning residents left and were replaced by newcomers with lower incomes.

Migrants from these high-tax areas are primarily heading to states such as Florida, Texas, and Tennessee, which offer low or no state income taxes and lower overall tax burdens. They are not moving to other high-tax states like Massachusetts, Illinois, or California.

This pattern has important fiscal consequences. In states with progressive tax systems, a relatively small number of high-income households contribute a large share of income tax revenue. When these residents depart, the loss in tax collections is difficult to offset by attracting more lower-earning individuals. New York and California, which rely heavily on top earners, face particular strain as the departing taxpayers take away a disproportionate portion of the tax base.

The data underscores how residents respond to tax levels by moving to more favorable environments, leaving high-tax states with reduced revenue for public services even as overall population numbers may shift.