The Great New Jersey Wealth Exit: Why $2.5 Billion in Income Fled the State
file photo courtesy of Boyd Loving
the staff of the Ridgewood blog
Trenton NJ, New Jersey is facing a significant fiscal wake-up call. According to the latest IRS migration data analyzed by the Tax Foundation, the Garden State isn’t just losing people—it’s losing its tax base. Between 2022 and 2023, the state saw a massive “wealth flight,” with billions in adjusted gross income (AGI) heading south toward lower-tax climates.
The Numbers Behind the Exodus
The data paints a stark picture for New Jersey’s economic future. While many states are growing, New Jersey has joined California and New York as one of the nation’s primary “exporting” states for residents and wealth.
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Tax Filers Lost: 19,370 net residents moved out.
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Income Drain: A staggering $2.55 billion in adjusted gross income vanished from the state’s tax rolls.
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The “Per Resident” Cost: For every net resident who left, New Jersey lost approximately $85,562 in taxable income.
Why Are They Leaving? The Tax Factor
Economists point to New Jersey’s 10.75% top marginal income tax rate—one of the highest in the U.S.—as a primary driver. As remote work becomes a permanent fixture for high-income professionals, the financial incentive to relocate has never been higher.
Where is the money going? The biggest beneficiaries of New Jersey’s wealth flight are states with zero income tax or significantly lower tax burdens:
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Florida: Gained $20.6 billion in AGI and 55,000+ filers.
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Texas: Added more than 56,000 new tax filers.
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The Carolinas & Tennessee: Consistently ranked as top destinations for NJ expats.
The “Doom Loop” Risk for NJ Taxpayers
The departure of wealthy households creates a disproportionate impact on the state budget. In New Jersey, a small percentage of top earners pays a massive share of the state’s income tax.
The Danger: As the tax base shrinks, the burden of funding schools, infrastructure, and healthcare falls on the residents who stay. This can lead to a cycle where the state raises taxes to cover the deficit, causing more residents to leave—a phenomenon fiscal analysts call a “taxation death spiral.”
Beyond Taxes: The Affordability Crisis
While taxes are the headline, the New Jersey cost of living compounds the issue. High property taxes, soaring insurance premiums, and some of the nation’s highest housing costs are pushing families to look elsewhere for economic stability.
“States with higher overall tax burdens and less competitive structures overwhelmingly lost residents and taxable income,” the Tax Foundation report stated.
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voting with their feet
Corporations, too. The Liberal states are simply driving away companies and individuals. Unfortunately, the Democrat voters don’t understand economics.
Income Tax Share by Earner BracketState
Top 1% Share Top 10% Share
New Jersey~ 44%. 70.5%
New York~ 46% 67.2%
So if 10% of these people move out we have a severe budget crisis
Democrat-driven exodus. The politics of class warfare. We are doomed to serving a life sentence along side the low IQ NJ city voters who vote with their palms up, and virtue-signaling suburban voters (Hello Ridgewood) who vote to sooth their souls.
It was the Republicans under Murphy who revised the Mansion Tax to be paid by the seller and raised the rates. $50 – $60k on a $2 million sale, taxed to the seller.
Drives the people out who have saved all their lives.
It’s the RINOs who did it to us.
sorry not true the nj gop has zero power for over 20 years
You must have missed:Phil Murphy served as the 56th Governor of New Jersey for exactly eight years.
A true RINO, served his rich friends not the the people of NJ.
He’s the one who brought the Realty Tax to apply to sellers at a high rate in 2025 w/o a lot of press.
Didn’t he go to Wharton with Trump?
And did you forget he was near king at Goldman Sachs?
Phil Murphy is an anti business democrat
Facts are important. Where did you get yours?
Truely ignorant and revealing of the problem we have where being a Democrat is the thing that matters most to many people. So much so that some convert the fact that Murphy who prided himself as a Democrat (with presidential aspirations) to thinking he was Republican because he was such a bad governor.