Blue States Double Down on Tax Hikes As Wealth and

Blue states are pushing new taxes on high earners as billions in income and 1000’s of taxpayers transfer to crimson states.

In California, New York, Washington, and Michigan, lawmakers are advancing proposals and poll efforts aimed at top earners. Washington is advancing a tax on income over $1 million, while California is pushing a tax on billionaire web value. Other states are weighing related plans, including taxes on residents who go away and widening the scope of income taxation.

IRS migration data from 2022-2023 reveals California misplaced almost $12 billion in taxable income in a single 12 months, while New York misplaced $9.9 billion. Florida gained $20.5 billion, and Texas gained $5.5 billion as taxpayers moved and took their income with them.

California misplaced roughly 230,000 residents over the same period, while lower-tax states gained both population and income at the same time.

New York Gov. Kathy Hochul (D) acknowledged the shift, as RedState beforehand reported:

“Maybe the first step should be go down to Palm Beach and see who you can bring back home because our tax base has been eroded.”

These proposals assume high earners will keep and take in larger charges. The migration data reveals in any other case.

JPMorgan Chase CEO Jamie Dimon has warned about New York’s tax construction:

“New York City has much going for it… but it also has the highest city and state corporate taxes and the highest individual income taxes.” 

Business leaders have been warning about this shift for years, pointing to rising prices, regulatory stress, and tax burdens that make long-term investment tougher to justify in high-tax states in contrast to lower-cost options, particularly as relocation turns into simpler for both people and firms.

The same sample reveals up in current strikes by the ultra-wealthy. Starbucks founder Howard Schultz is relocating to Florida after many years in Seattle, a transfer he described as personal that got here as Washington pushed larger taxes on top earners. Amazon founder Jeff Bezos made a related transfer to Florida during earlier tax fights in Washington. Companies are increasing in Texas and Tennessee while pulling back in higher-tax states.

High earners can transfer. Companies can transfer. Capital strikes even quicker. When tax burdens rise, those strikes comply with.

Read More: Washington Passes 9.9 Percent Millionaire Tax – Now Starbucks Founder Howard Schultz Is Leaving Seattle

Battle in Seattle: Amazon vs. The Socialists

Blue states continue to pursue larger charges even as the taxpayers producing that income relocate. Florida and Texas don’t impose income taxes, and their population and income beneficial properties replicate that. That distinction is seen in where people transfer, where firms develop, and where income lands.

Those taxpayers contribute more than income tax income. They invest, construct firms, rent staff, and drive the financial exercise that state budgets rely on. When they go away, the loss doesn’t keep at the top. It spreads across the tax base.

That creates another drawback. Budgets constructed around a shrinking group develop into tougher to maintain, yet the response has often been to raise charges additional or develop who will get taxed as the bottom narrows.

Higher charges aren’t capturing that income. They’re driving it out.

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