Manhattan experienced the nation's largest net loss of adjusted gross income, shedding approximately $922 million between 2022 and 2023, according to recent IRS data. This occurred even as the borough attracted the highest number of new tax filers in the country during the same period. Wealthy taxpayers are increasingly migrating from high-tax states like New York to lower-tax destinations such as Florida and Texas.
The exodus of high-income earners has significant fiscal implications for states that rely heavily on their contributions to fund public services. In states with progressive tax systems, a relatively small number of affluent households can account for a disproportionate share of income tax revenue.
While Manhattan led the nation in new tax filers, its gain was offset by the departure of higher-earning residents. This trend underscores the importance of analyzing income migration alongside population shifts, as the composition of a state's tax base is critical for its financial stability.
Other areas in New York also saw substantial outflows. Queens County reported the second-largest net loss of tax filers nationwide with 17,109, and the Bronx lost 16,319. Suffolk and Nassau counties were also among the top 10 counties with the biggest losses. All of the counties experiencing the largest net losses in tax filers were located in either New York or California, states known for higher taxes and costs of living.
These migrating taxpayers are frequently relocating to Republican-led states like Florida and Texas, which offer lower tax burdens. "It's very, very clear that people ultimately vote with their feet, and when they feel like they're getting taxed too much, they go somewhere else where they will be taxed less," E.J. Antoni, chief economist at the Heritage Foundation, told Fox News Digital. He added that New York is "hemorrhaging their most valuable resource — people."
Texas, in particular, has been highlighted for its competitive tax system, attracting billionaires, CEOs, and manufacturers due to its favorable costs and strong supply chains, according to Gabriela von zur Muehlen, chief policy officer at the Texas Association of Business. The migration patterns suggest a broader trend of taxpayers choosing states with low or no income taxes and lower overall taxation levels.