New IRS data, however, show the speed with which blue states are losing taxpayers—and their adjusted gross income (AGI)—is increasing. A recent Wall Street Journal analysis found that more than 100,000 people left Illinois in 2021, taking with them some $11 billion in AGI, nearly double its 2019 total. For New York it was $24.5 billion, an increase of more than 150 percent from 2019. California, meanwhile, saw its AGI loss ($29 billion) more than triple since 2019.
That people are migrating from these states is important. But who is migrating is equally important, and the data paint a bleak picture for these states. Taxpayers giving up on the Prairie State and the Empire State made about $35,000 more per year than new arrivals. For Florida, the data are even more stark. The average income for a new arrival to the Sunshine State was roughly $150,000—more than double those leaving.
“In other words, the geese with the golden eggs are flying away,” writes economist Daniel Mitchell, referring to the IRS data.
[I’m not sure this is an “Atlas Shrugged” phenomenon as much as it is a normal market response to negative incentives, not all of which are financial. The producers have not given up production — they have simply moved to where the environment is more favorable. The rapidity of this movement is a function of just how bad those negative incentives got in a short period of time. It’s not yet Galt Gulch, but it is a lesson to the states benefiting from the migration that they had better keep their own incentives positive. — Ed]
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