High-income residents are increasingly leaving high-tax states like California for lower-tax destinations like Florida, resulting in significant revenue losses for origin states. The stark tax rate differences, particularly California’s top marginal income tax rate of 13.3% versus Florida’s 0%, drive much of this migration among wealthy households. Recent data shows states like California and New York losing billions in adjusted gross income (AGI) annually to no-income-tax states. (5)

Migration Patterns

High-tax states lost over 232,000 taxpayers in 2019 alone, with $31.2 billion in net AGI outflow, primarily to Florida and Texas. California posted a net AGI loss of $11.9 billion recently, while New York lost $9.9 billion, with about 70% of outbound AGI from households earning over $200,000 . Remote work has accelerated this trend by decoupling high earners from traditional job centers. (4)

Key Tax Differentials: California vs. Florida

California’s progressive income tax peaks at 12.3% plus a 1% surcharge for incomes over $1 million, reaching 13.3%—the nation’s highest—while Florida imposes no state income tax on wages, investments, or capital gains. A $250,000 earner pays roughly $15,000–$30,000 more annually in California income tax alone. (1,2)

Sales taxes offer minor relief: California’s 7.25–10.5% versus Florida’s 6–8.5%, though Florida taxes more services. Property taxes average 0.71% in California (capped at 1% under Prop 13) versus 0.82–0.89% in Florida (uncapped, reassessed at market value), but Florida’s high homeowner insurance ($4,000–$8,000/year coastal) offsets some savings. (5)

Fiscal Impacts

Departures erode income-tax bases, where high earners contribute disproportionately (e.g., California’s top 1% pay ~50% of state income tax). This triggers revenue shortfalls, potential service cuts, and higher burdens on remaining residents, risking further outflows. (3)

Broader Effects

Lost spending, investment, and business activity weaken local economies; companies may redirect growth elsewhere, signaling declining competitiveness.

Sources

1. SmartAsset, “California vs. Florida: Which Is Better for Taxes?,” April 10, 2025.

2. Country Tax Calc, “California vs Florida Tax Comparison 2026,” accessed 2026.

3. Kelley R. Taylor, “People Are Leaving High-Tax States: Here’s Where They’re Moving,” Kiplinger, April 5, 2026.

4. National Taxpayers Union Foundation, “Taxpayers Are Fleeing from High-Tax States, Shifting $43 Billion in Wealth,” August 31, 2024.

5. Heritage Foundation, “If You Tax Them, They Will Run: Millions of Americans Flee California and New York,” March 11, 2025.

Written by Wesley V. Wellman

Wesley V. Wellman has been active in the financial services field for more than 40 years. His brokerage firm, Wellman Realty Company, specializes in multi-family and commercial investment property. Since the year 2000, Mr. Wellman has sold over $342 million of investment property. He is a Santa Monica apartment industry leader and is frequently quoted in the local press about rental property issues. He is one of the founding directors of the Action Apartment Association, which was formed in 1980. As an advisor, Mr. Wellman draws on a wealth of educational background in real estate, taxation, securities and estate planning.