The latest IRS data on interstate migration reveal that California and New York continue to lose taxpayers and their income to other states, with the top 10 counties for net filer losses all located in those two high-tax states.
Compiled from federal tax returns, the figures offer one of the clearest snapshots of where Americans are relocating — and where their income is moving with them. Economists say migration patterns help explain broader shifts in state economies, tax bases and housing markets as families weigh affordability, taxes and job opportunities when deciding where to live.
Los Angeles County led the nation with a net loss of 17,496 tax filers, who took nearly $1.9 billion in adjusted gross income with them to other states. The next-largest losses were recorded in Queens County, New York (-17,109), the Bronx (-16,319), Orange County, California (-11,618) and Suffolk County, New York (-10,434).
"It's very, very clear that people ultimately vote with their feet and when they feel like they're getting taxed too much, they go somewhere else where they will be taxed less," Heritage Foundation chief economist E.J. Antoni told Fox News Digital.
What the Left Is Saying
Progressive economists and Democratic policymakers have pushed back against framing migration as a simple response to taxation. They argue that high-cost coastal states offer compensating benefits including stronger labor protections, higher minimum wages and more robust public services.
Critics also note that Los Angeles and New York City remain economic powerhouses attracting significant investment and talent despite their tax burdens. Some analysts suggest the income outflows reflect housing affordability crises rather than tax policy alone — and argue that addressing housing costs would help retain residents regardless of marginal tax rates.
"The debate ignores what people are actually leaving behind," one progressive economic researcher told Fox News Digital, speaking on condition of anonymity to discuss pending legislation. "When you look at total compensation packages including healthcare, retirement benefits and public infrastructure quality of life, the calculus changes."
What the Right Is Saying
Conservative economists and Republican strategists point to the IRS data as evidence that high state income taxes drive residents to relocate. They argue the trend represents a fundamental market response to tax policy.
"The 'vote with your feet' movement is real," Paul Teller, a conservative strategist who previously served in the Trump-Pence White House, told Fox News Digital. "Americans continue leaving high-tax, highly regulated states for places where they can keep more of what they earn and face lower costs of living."
Teller said policymakers in states losing residents should take notice. "What baffles me, especially as a former New Yorker is that there doesn't seem to be a lot of concern in the states that are losing people," he said.
He argued the trend could carry long-term fiscal consequences if affluent taxpayers continue leaving. "Let's see what happens when the wealthy keep moving out of big blue states like California and New York," Teller said. "We'll see what happens to tax revenue. We're already seeing it. It's going down significantly."
What the Numbers Show
The IRS migration data reveal stark patterns in American relocation: Top 10 counties by net loss of interstate tax filers:
- Los Angeles County, CA: -17,496 filers, -$1.9 billion AGI
- Queens County, NY: -17,109 filers
- Bronx, NY: -16,319 filers
- Orange County, CA: -11,618 filers
- Suffolk County, NY: -10,434 filers
- San Diego County, CA: -9,401 filers
- Nassau County, NY: -9,130 filers
- Riverside County, CA: -8,968 filers
- San Bernardino County, CA: -8,462 filers
- Kings County, NY: -6,924 filers Top gaining counties:
- Maricopa County, AZ: +9,353 filers
- Harris County, TX: +8,955 filers
- King County, WA: +8,297 filers
- Clark County, NV: +7,524 filers Manhattan presents a mixed picture: it gained more interstate tax filers than any other county in the nation while simultaneously losing nearly $1 billion in adjusted gross income — suggesting many newcomers earned less than those who departed. California maintains one of the nation's highest top marginal income tax rates. Texas, Tennessee and Florida have no state income tax.
The Bottom Line
The migration data present a challenge for California and New York as they seek to maintain tax revenues while retaining affluent residents. Policymakers in both states face pressure to balance budget needs against concerns that higher taxes drive population outflows. The trend toward Sun Belt and Mountain West states with lower tax burdens has accelerated over recent years, according to economists who study interstate migration. What remains less clear is whether the pattern represents a permanent restructuring of American geography or a temporary response to pandemic-era work flexibility. Watch for upcoming state budget projections in Sacramento and Albany as officials grapple with implications for school funding, infrastructure maintenance and public safety budgets that depend on income tax collections.