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Florida raking in billions as Americans abandon high-tax states

Florida raking in billions as Americans abandon high-tax states

State governments can benefit greatly from an influx of movers – enjoying everything from increased tax revenues to new business activity.

Florida raking in billions

Recently, changes to the U.S. tax code have encouraged an increasing number of people to move – taking their cash to lower-tax states like Florida.

As it turns out, however, Florida has been banking on moving trends even prior to the implementation of the new tax law.

RELATED:>>Millennials flocking to South Florida and the Treasure Coast to buy homes

The Sunshine State drew in a net influx of about $17.7 billion in adjusted gross income (AGI) – most of which (72 percent) came from those aged 55 and older. It is consistently one of the most popular destinations for retirees due to affordability and low taxes.

Florida’s $17.7 billion in net AGI dwarves the remaining 19 states that saw a positive net influx of income – which combined for a total of $19.4 billion.

South Carolina and another no-income tax state – Texas – trailed Florida, with net adjusted income totals around $2.25 billion apiece.

Florida is unique in that it also draws a large proportion of higher net-worth individuals. 85 percent of its net inflow of income came from people earning at least six-figures.

On the flip side, New York lost the largest amount of adjusted gross income from migration, about $8.8 billion.

Another high-tax state, Connecticut, had the largest income loss relative to its overall economy – at $2.6 billion. Connecticut, Pennsylvania, New Jersey, Illinois and New York lost about half of their income from people earning more than $200,000. Indicating the wealthy were picking up and leaving.

While the study analyzed data from 2016, this trend has likely only intensified thanks to recent changes to the U.S. tax code. A $10,000 cap on state and local tax deductions has caused an exodus from states like New York, Connecticut and California – where tax burdens were already onerous – to low-tax states like Florida, Texas and Nevada.

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Data from the U.S. Census Bureau showed that while Florida received more movers than any other state last year. New York’s outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.  Individuals earning $650,000 can save more than $69,700 in taxes per year by moving from New York to Florida.

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