According to the latest IRS migration data, New York and California experienced a combined net loss of 373,309 residents between 2022 and 2023, resulting in a $23.5 billion reduction in adjusted gross income for these states, which directly impacts their tax revenue collection [1]. This migration is not temporary; it represents a permanent shift in the tax base, as confirmed by the IRS raw migration files [1]. The CEO of the Partnership for New York City highlighted the seriousness of this trend, stating, 'The crowd that keeps daring businesses to leave should treat this as a flashing warning sign. When jobs go, revenue goes as well and the affordability problem gets worse.' [1]
California serves as a case study for this phenomenon, having recorded a net loss of 216,000 residents in 2025 alone, with Los Angeles County leading the nation by losing 54,000 residents in a single year [1]. Two major policies are cited as accelerating this exodus: a retroactive wealth tax, which is heading to the ballot and is supported by 52 percent of voters, and a push for a $30-per-hour minimum wage in Los Angeles and other areas [1]. The article argues that these policies erode the tax base, increase unemployment, reduce labor demand, and push prices higher, making it increasingly unaffordable for residents to stay [1].
New York is facing similar challenges. JPMorgan Chase CEO Jamie Dimon warned that excessive taxation, even if considered 'moral' by some politicians, is detrimental to cities, and that Americans 'vote with their feet' [1]. Mayor Mamdani is proposing a 9.5 percent property tax hike on middle-class New Yorkers, affecting over three million residential units, most of which are occupied by households earning around $122,000 a year [1]. The city is also considering tapping into its rainy day reserves to address budget gaps, but the article contends that increasing taxes on already stretched residents will only worsen affordability issues [1].
The migration trend is not limited to individuals; capital is also relocating. Bloomberg reported that between 2020 and early 2023, more than 370 investment firms managing $2.7 trillion in assets moved their headquarters out of high-tax states and into the Sun Belt, with New York and California each losing roughly $1 trillion in managed assets [1]. The article concludes that money and people are flowing toward states with no income tax, such as Florida, Texas, Tennessee, and Nevada [1].
CONCLUSION
IRS migration data and industry commentary indicate a significant and ongoing exodus of both people and capital from New York and California, driven by high taxes and affordability concerns. This trend is causing a substantial loss in tax revenue and managed assets, with market implications likely to be severe for both states. The migration toward lower-tax states is expected to continue unless policy changes address the underlying issues.