The Internal Revenue Service shows an outward migration from California has been growing. In 2021, the net migration of households with a federally adjusted gross income of $200,000 or more leaving the state increased, resulting in a loss of $20.4 billion in taxable income and an estimated $1.7 billion reduction in state personal income tax revenues.
The estimated tax loss from all earners was $2.0 billion in 2021. Texas, Arizona, and Nevada were the most popular destination states for high earners leaving California.
Both high earners and lower and middle-income earners are leaving the state, resulting in a net loss of 161,800 tax returns comprising 339,500 persons and a total AGI of $29.1 billion.
California has one of the highest tax rates in the country, and this, together with the high cost of living, could be contributing to the exodus of residents.