High Earners: 8.68 Million
. The migration of these high-earning households can have significant effects on a state’s tax base and finances.
SmartAsset data below:
Just as in last year’s study, no state saw a larger influx of high-earning households than Florida. The Sunshine State gained 40,134 households earning at least $200,000 per year and only lost 12,567. Florida is one of nine states that doesn’t levy an income tax and added a net total of 27,567 high earning taxpayers.
While Texas had the second-largest net inflow of high earners in 2021 – 9,008 – that gain was just a third of Florida’s net migration. In total, Texas lost 13,743 households that earn at least $200,000 but gained 22,751.
North Carolina (5,446), Arizona (4,563) and South Carolina (4,510) round out the top five states with the largest net inflows of high-earning taxpayers, followed by Tennessee (3,917), Nevada (2,785) and Idaho (2,315).
It’s impossible to overlook the role of state income tax on these trends. Four of the 10 states with the largest net influxes of high earners in 2021 do not levy a state income tax. Meanwhile, New Hampshire, which had the 11th largest net inflow of taxpayers earning $200,000 or more, does not tax earned income but taxes interest and dividends.
California’s outflow of high-earning households accelerated in 2021 when the state recorded a net loss of 27,341 taxpayers earning at least 200,000. That was a 42% increase from 2020 when the Golden State lost a net total of 19,229 high earners.
California’s net loss was also nearly 8,000 more than New York, which posted the nation’s second-largest net migration of high earners out of the state (19,795).
Illinois, Massachusetts and New Jersey had the third-, fourth- and fifth-largest net outflows of high-earning households in 2021, followed by Virginia, Maryland and Minnesota.
While these states had the largest net outflows of high earners in 2021, they still maintain some of the nation’s highest percentages of high-earning households. In fact, at least 7.2% of the tax base in each of these states earn $200,000 or more per year.
To determine where high-earning households are moving, we considered data from all 50 states, as well as the District of Columbia. We defined high-earning households as those with adjusted gross incomes of $200,000 or more. More specifically, we closely examined the following two metrics:
To rank the states, we determined each state’s net inflow of high-earning households. This is the inflow minus the outflow. We then ranked the states according to net inflow in descending order.
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