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More Evidence that Americans Are Fleeing the Escape States

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By Monkey Business Images @ Shutterstock.com

You are probably familiar with Your Survival Guy’s Super States. In 2023, my top 10 Super States included:

Rank State

  1. New Hampshire
  2. Florida
  3. Utah
  4. South Carolina
  5. Arizona
  6. Texas
  7. South Dakota
  8. Montana
  9. Idaho
  10. Wyoming

But do you know about the Escape States? Those are the ten worst-ranked states on Your Survival Guy’s annual Super States list. In 2023’s rankings, that included:

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  1. Connecticut
  2. Rhode Island
  3. Massachusetts
  4. Maryland
  5. New Mexico
  6. Hawaii
  7. New York
  8. Illinois
  9. California
  10. New Jersey

New IRS data analyzed by the Tax Foundation shows that Americans fled the Escape States in droves during the height of the Covid pandemic in 2020-2021. Andrey Tushkov and Katherine Loughead explain:

The IRS data show that between 2020 and 2021, 26 states experienced a net gain in income tax filers from interstate migration—led by Florida (+128,228), Texas (+82,842), North Carolina (+40,828), Arizona (+32,636), and Tennessee (+30,292)—while 24 states and the District of Columbia experienced a net loss—led by California (-158,220), New York (-142,109), Illinois (-53,910), Massachusetts (-25,029), and Louisiana (-14,113).

When all individuals associated with each tax return are accounted for, including spouses and dependents, 25 states experienced a net gain in individuals while 25 states and D.C. experienced a net loss. Only one state, Connecticut, saw a loss in tax returns attributable to interstate migration but a gain in individuals associated with the returns of those who moved in. Washington and Colorado, in contrast, saw a gain in tax returns but a loss in the total number of individuals on those returns.

States with the highest net AGI gains included Florida at $39.2 billion, Texas at $10.9 billion, and several states (North Carolina, Arizona, Tennessee, South Carolina, and Nevada) at around $4 billion each. States with the highest net AGI losses included California at -$29.1 billion, New York at -$24.5 billion, Illinois at -$10.8 billion, and Massachusetts at -$4.3 billion.

The map and table below show states’ gains and losses in resident population, income tax returns filed, and AGI attributable to interstate migration.

Many factors influence an individual’s or family’s decision to move from one state to another—employment or educational opportunities, proximity to family or friends, and geographic and lifestyle preferences like weather, natural landscape, and population density, to name a few. Cost-of-living considerations, including tax differentials, may not be the primary reason for an interstate move, but they are often one of several factors people consider when deciding whether—and where—to move.

Do taxes affect where people move? Do taxes affect interstate migration?

More Americans Moved to States with Lower Taxes and Sound Tax Structures

Consistent with last year’s version of this publication, it is clear from the 2020-2021 IRS migration data that there is a strong positive relationship between state tax competitiveness and net migration. Overall, states with lower taxes and sound tax structures experienced stronger inbound migration than states with higher taxes and more burdensome tax structures.

Of the 10 states that experienced the largest gains in income taxpayers, four do not levy individual income taxes on wage or salary income at all. Additionally, eight of the top 10 states either forgo individual income taxes on wage and salary income, have a flat income tax, or are moving to a flat income tax.

Action Line: Get the latest updates about the Super States, and the Escape States, by clicking here to subscribe to Your Survival Guy’s monthly Survive & Thrive letter.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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