Americans Weary of Taxes and Soaring Rent... Leaving New York

Escape from Major Cities like California... Migration to Sun Belt Areas like Florida

[Asia Economy Reporter Haeyoung Kwon] Americans are moving from states with high tax burdens to states with lower tax rates. The trend of relocating from major cities like New York and California to Sun Belt regions such as Florida, to escape high taxes, soaring rents, and living costs, is accelerating.

Bloomberg News reported on the 1st (local time), citing the National Association of Realtors (NAR), that California's population decreased by 343,230 last year. This represents a 0.3% decline compared to the previous year.

Among the 50 U.S. states, New York had the second-largest population outflow after California. There, 299,557 people (-0.9%) left. Following were Illinois (-141,656, -0.8%), New Jersey (-64,231, -0.1%), and Massachusetts (-57,292, -0.1%) in population decline.

On the other hand, Florida saw a net inflow of 318,855 people last year, increasing its population by 1.9% compared to the previous year. Texas (230,961), North Carolina (99,796), South Carolina (84,030), and Tennessee (81,646) also experienced population inflows.

Bloomberg analyzed, "Americans are leaving high-tax states to move to the Sun Belt, where they can have bigger homes, sunshine, and lower living costs," adding, "The low tax rates and mild weather in Florida and Texas are attracting Americans."

In particular, the top five states with the highest population inflows, including Florida, have effective tax rates ranging from 7.6% to 9.9%. In contrast, states experiencing population outflows such as California, New York, Illinois, New Jersey, and Massachusetts have relatively high effective tax rates between 11.5% and 15.9%. It is reported that Elon Musk, CEO of Tesla, moved from Los Angeles (LA), California, to near Austin, Texas, in 2020 because California's income tax is the highest in the U.S. Meanwhile, Texas does not impose a personal income tax.

Bloomberg also reported that the trend of leaving major U.S. cities, which began in earnest after COVID-19, continues even as the pandemic winds down. While some workers are returning to major cities like New York and San Francisco as companies end remote work, most other city residents find it difficult to move back to big cities due to high housing rents and rising grocery prices.

Nadia Evangelou, an economist at NAR, stated, "The trend of moving from city centers to less dense and more affordable areas is expected to continue."