WSJ Opinion: Potomac Watch America's Money Migration: Democratic States Keep Losing Taxpayer Income
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Mar 31, 2026 Colin Levy, Wall Street Journal editorial board member who explains legal and constitutional angles. Alicia Finley, WSJ columnist who analyzes IRS migration and state fiscal trends. They discuss IRS data showing income fleeing high-tax states to Florida, Texas and Tennessee. They debate millionaire taxes, legal challenges in Washington and how fiscal choices reshape where money and people move.
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High Tax States Keep Losing Big Income Flows
- High-tax states continue losing taxable income to low-tax Sun Belt and no-income-tax states.
- IRS data (2022–2023) shows New York lost $9.9B, Illinois $6B, and Florida gained $20.6B, with New Hampshire gaining $900M from Massachusetts.
No Income Tax States Attract High Earners
- Tax policy is a measurable migration driver beyond weather or amenities.
- States with no income tax (New Hampshire, Wyoming, South Dakota) show gains, and Massachusetts outflow persisted after a 4% millionaire surcharge.
Budget Risk From Relying On The Wealthy
- Relying on wealthy taxpayers makes state revenues volatile and risk-prone.
- Alicia warns boom-time capital gains can vanish in downturns, citing California's post-2008 deficits tied to overreliance on high earners.