According to a new study from real estate platform MyEListing.com, California tops the list as the state that has lost the most tax income revenue due to people fleeing the crime-ridden mess it has become. The study estimates that California lost a staggering $343.2 million in tax income in 2021 alone. Coming in second is deep blue New York with a net loss of $299.6 million, followed by Democrat-run Illinois with a loss of $141.7 million.
This mass exodus is reflected in the data from the U.S. Census Bureau, which reveals that an estimated 343,000 Californians moved out between July 2021 and July 2022, while only 125,000 people moved in. Los Angeles County took the hardest hit, with a decline of over 90,000 in population. Overall, California’s population has declined by about half a million since 2020.
The primary reason for the loss of tax income in California is the high-income earners seeking greener pastures in states that offer lower taxes and a lower cost of living. It’s not surprising that Florida is the top destination for these individuals, with the state gaining a whopping $12.4 billion in tax income from migration, $3.5 billion of which comes from former California residents. Texas and Arizona also saw substantial gains at $10.7 billion and $9.4 billion, respectively.
Florida’s appeal to high-income earners can be attributed to the fact that it has become a hotspot for individuals and families with substantial income and assets. As the study highlights, money goes where it is treated best, and Florida offers a better treatment for the wealth acquired by these high-income earners. Not only does Florida offer lower taxes, but it also ranks first in terms of population growth, with over 674,000 people moving to the state from elsewhere in 2021.
The mass exodus from California includes notable names such as “Happy Days” actor Scott Baio, who moved to Florida after residing in California for 45 years due to growing crime rates and an uncontrolled homeless population. Tesla CEO Elon Musk also caused quite a stir last year when he moved the company’s headquarters from California to Texas. These high-profile departures, along with companies like Chevron making similar moves, make it even harder for California to pay off its $32 billion deficit.
This study highlights the negative consequences of California’s high personal income tax rates and the policies that have contributed to the state’s downward spiral. It’s time for California to reassess its approach and make changes that promote prosperity and attract rather than repel those who contribute to the state’s economy. Otherwise, the wealth migration out of California will only continue, exacerbating the state’s economic woes.