HomeBudget & Tax NewsIRS Data: As High Income Californians Move Elsewhere, Poorer Residents Move In

IRS Data: As High Income Californians Move Elsewhere, Poorer Residents Move In

The people fleeing California earned an average of twice the state median pay, according to IRS data; newcomers earn less.

(The Center Square) – Next time California Governor Gavin Newsom goes on a political swing through Florida, he might notice the 40,000 Californians who moved there, according to new IRS data released on Thursday. As he flies back, he can wave to the 105,000 who moved to Texas, the state with the most former Californians, and 63,000 in Arizona, the second most.

In all, 716,948 Californians moved elsewhere in the United States in between filing as local taxpayers in 2020 and elsewhere in 2021. In the same year, 385,188 Americans from other states moved in, so IRS data shows the net loss to California was 331,760.

And those people took a lot of money with them. The taxpayers took $29 billion in taxable income, $183,737 on average. That’s higher than the state’s median household income of $84,097, according to the U.S. Census.

“California used to be famous for its production of movies, food, world-beating college graduates, aerospace technology, medicine, West Coast rap, the Bakersfield Sound, and rock ‘n’ roll. Today our top products are bad ideas, high taxes, regulation, wildfires, homelessness, crime, and an education system ranked among the worst in the nation. It’s no surprise that we now lead the nation in the export of productive Americans – people who’ve worked, saved and paid taxes but who can no longer live with such dysfunction,” said Will Swaim, president of the California Policy Center.

The data shows Texas is the top destination for Californians moving out, but that doesn’t mean that Texans aren’t open to moving to the Golden State. The IRS says 36,092 Texans did just that in 2020.

The problem for California, a state with high taxes on the wealthy and generous benefits for those with low incomes, is that the people moving from California to Texas are significantly different than those moving in the reverse direction. The IRS data show that California taxpayers looking to make a home in Dallas or Houston earn an average taxable income of $177,555. Texans who moved to San Diego or Fresno in 2020 reported only $75,393 on average.

The people fleeing California filed that they earned an average of twice the state median pay, while the newcomers are below that.

And that pattern holds true for other states as well. California taxpayers moving to Florida averaged over $300,000 per filing. Florida is sending taxpayers who earn an average of $90,000.

Nationally, those moving out of California averaged $125,000 in 2020, while those moving in earned $87,000. For a state struggling with housing costs and among the nation’s highest cost of living, that mismatch can’t help but make the state’s challenges more daunting.

“If California can’t serve as a model for the rest of America, maybe we can serve as a warning,” Swaim said.

Originally published by The Center Square. Republished with permission.

For more from Budget & Tax News.

For more public policy from The Heartland Institute.

David Mastio
David Mastio
David Mastio, a regional editor for The Center Square, has 25 years of newspaper reporting and editing experience with USA TODAY, The Detroit News, The Washington Examiner, The Virginian-Pilot and The Washington Times. In addition, he has been a speechwriter for a member of the cabinet and launched his own web publishing company.


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