In just a single year, New York and New Jersey faced a staggering loss of $140 billion in revenue.
This phenomenon could be described as “moving van economics,” and it appears that New York and New Jersey are on the losing end.
According to a new analysis from my organization, which incorporates the latest census and income tax data, these two states have experienced greater resident losses over the past decade than all but California.
From 2015 to 2024, New York saw a decrease of 2 million residents.
These represent significant population declines for two major industrial and financial hubs that were prominent throughout the 20th century in the United States.
State Tax Haven
Many of those leaving New York and New Jersey have relocated to growing states like Florida, Texas, and Tennessee. This migration helps explain why, for the first time, the Southeast has become the most economically dominant region in the country.
Adding to the concerns for New York and New Jersey is that those who move often take substantial personal income and purchasing power with them. Between 2012 and 2022, New York lost $111 billion in revenue, while New Jersey saw a drop of over $31 billion.
Once lost, this income is usually gone for good—except for the rare occasions when former residents return. This revenue loss accumulates year after year.
So, what drives so many people away from the Northeast?
There are numerous reasons, including the desire to save on living expenses, crime, better job prospects, warmer climates, and yes, tax rates.
New York, New Jersey, and California rank as the three biggest losers in the interstate population shift, which coincidentally are also the states with the highest local income tax rates. In contrast, states like Florida and Texas impose no income tax at all.
Is this a mere coincidence? It seems unlikely.
This situation serves as a significant warning. New York City holds the title for the highest income tax rate in the country. Zohran Mamdani, a leading candidate for mayor, proposes increasing taxes on the wealthy by an additional two points.
When will voters come to the realization that, after relocating to Florida, they can no longer tax New York’s billionaires?
