The Great Domestic Migration: New IRS Data Shows Billions Fleeing High-Tax States
the staff of the Ridgewood blog
Ridgewood NJ, The numbers are in, and the trend is undeniable. According to the latest IRS domestic migration data for 2023, American wealth is moving at a record pace—and it’s headed straight for the “low-tax” sunbelt.
Our team at VoteWithYourFeet.net has been crunching the latest tax return data, and the findings reveal a massive “blowout” in the interstate competition for capital.
The “Winner” vs. “Loser” States
The data shows a stark divide between states that are “gobbling up” net income and those seeing their tax bases erode. Nine of the top 10 states that lost the most money in 2023 were high-tax “blue” states, led by California and New York.
The Tax Gap by the Numbers:
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The “Loser” Average: The top 10 states losing residents have a weighted average tax rate on the wealthy of 10%.
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The “Destination” Average: The top states receiving these residents have an average tax rate of under 2%.
The “Daddy Warbucks” Effect: For a billionaire moving from a high-tax state to a low-tax destination, the move can result in an immediate savings of $70 million every single year.
Corporate Fiduciary Duty: The Case for Relocation
It’s not just individuals. We are seeing a fundamental shift in where corporations choose to domicile. While Silicon Valley, Chicago, and New York City once offered “unbeatable” business advantages, those perks have largely dissipated in the era of remote work and rising crime.
Current Top Corporate Income Tax Rates (2026):
| State | Corporate Tax Rate |
| New Jersey | 11.5% |
| Minnesota | 9.8% |
| Illinois | 9.5% |
| Alaska | 9.4% |
| Maine | 8.93% |
| California | 8.84% |
We believe corporations have a fiduciary duty to their shareholders to maximize after-tax profits. This has led to a burgeoning shareholder movement pressuring publicly traded companies to engage in “domestic inversions”—relocating headquarters to low-tax hubs like Miami, Dallas, Salt Lake City, and Austin.
The End of the “Patriotism” Plea?
New York Governor Kathy Hochul recently made a “patriotism” plea, asking the wealthy to stop moving to Florida. However, as the Wall Street Journal recently reported, many of these same “loser” states are responding to their shrinking tax base by raising tax rates even further.
As long as the “tax penalty” for staying remains high, the flow of billions toward economic freedom is unlikely to slow down.
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Tags: #Economy #TaxMigration #WealthGap #IRSData #VoteWithYourFeet #CorporateTax #RealEstateTrends #EconomicFreedom
