Americans Are Fleeing Troubled, Tax-Heavy ‘Blue States’ and Heading to Texas, Florida, and Other Sunbelt Havens: Census Bureau

‘The two largest flows,’ a survey statistician at the Census Bureau, Mehreen Ismail, wrote of the findings, ‘came either to or from the four most populous states: large numbers of people moved from California to Texas and from New York to Florida.’

Governor Newsom at Sacramento, on June 24, 2022, and Governor DeSantis at Sioux Center, Iowa, May 13, 2023. AP

Americans are increasingly restless. As they rethink whether they want to live with the higher taxes, crime, and illegal immigration that increasingly characterize “blue” states, people and their capital are fleeing to “red” states.

That’s the latest from the Census Bureau, which released on Tuesday a report disclosing that among the 8.2 million Americans relocating their residencies in 2022, Florida and Texas were the top destinations. These dispersions reflect a growing trend of interstate migration that is transforming the socioeconomic landscape of America.

U.S. migration patterns appear to reflect a contest of “blue” versus “red.” About 300,000 more Americans moved between states in 2022 than in 2021, according to the report, which is based on one-year data from the 2022 American Community Survey. The plurality of these movers are fleeing states with steep taxes and left-leaning politics. 

“The two largest flows,” a survey statistician at the Census Bureau, Mehreen Ismail, wrote of the findings, “came either to or from the four most populous states: large numbers of people moved from California to Texas and from New York to Florida.”

The disparate policies championed by Governor Newsom versus Governor Abbott, and Governor Hochul versus Governor DeSantis, might be fueling the moves. Financial planner Matthew Carbray points to the diverging state responses to heightened pressure at the U.S.-Mexico border as migrant crossings soar to near-record levels.

“Mass immigration and a lot of it undocumented into large ‘blue’ cities is stretching police and social service capacity,” Mr. Carbray says, “resulting in an uptick in crime and hostility.” The Census Bureau declined the Sun’s request to explain its report, as it did not collect data on the reasons for the moves, but other reports disclose that inflation and other economic woes, as well as lingering pandemic health restrictions, are driving the trends.

Fiscal policy is the leading motivator. States with the highest taxes — California, New York, and Illinois — are facing an exodus of residents, while the states with surging populations — Florida and Texas — do not have an income tax. 

“First and foremost, taxation is motivating high income earners to seek a more favorable tax environment,” Mr. Carbray tells the Sun. “Entrepreneurs are seeing an opportunity to attract the next generation of leadership and innovators where there is population growth, especially in the case of the millennial generation.”

New York and California have seen the largest losses of tax income, to the tune of more than $600 million in total, according to an August report by an online real estate portal, MyEListing. Meanwhile, Florida is seeing a $12.4 billion boost in tax revenue and Texas is gaining $10.7 billion, following influxes of movers. “The findings illuminate how economic and fiscal policies at the state level,” MyEListing said, “can significantly influence wealth distribution across the U.S.”

The migration to the Sun Belt has taken with it leading financial firms and some of the richest Americans. New York and California have each lost $1 trillion worth of assets since the end of 2019, according to a Bloomberg News study in August. The loss of thousands of high-paying jobs is depleting sources of tax revenue and straining city and state finances. Billionaires departing blue states for Texas or Florida include Elon Musk (to Austin from Los Angeles) and Jeff Bezos and Ken Griffin (to Miami from Seattle and Chicago).

While New York City remains a top global financial hub, the migration to southern destinations is causing surges in Dallas and Miami. “The moves,” Bloomberg writes, are “often born out of a desire for lower taxes, warmer weather and cheaper mansions.” As one chief executive, Cathie Wood, who moved her investment firm to Florida, put it, the region has “talent, innovative spirit and quality of life.”

While the District of Columbia had one of the highest immigration rates, 44.3 percent, according to the Bureau, California had the lowest immigration rate, 11.1 percent. A string of high-profile residents have fled the state in recent years. In 2020, podcaster Joe Rogan left for Texas, telling his fans he wanted to live for “a little more freedom.”  

Restless Americans appear to be heeding the advice of one of the most influential commercial bankers in America, Walter Wriston, who once said: “Capital goes where it is welcome and stays where it is well treated.” 

The New York Sun

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