Florida rakes in billions as Americans abandon high-tax states

State governments can advantage greatly from an influx of movers – taking advantage of everything from a raise tax income to a new commercial activity.

Recently, changes to the US tax code have encouraged more and more people to relocate – taking their money to low-tax states like Florida.

It turns out, however, that Florida capitalized on shifting trends even before the new tax law was implemented.

According to a new study by Loan tree, which analyzed IRS data from 2016, Florida is the top recipient of relocations out of all 50 states – by a landslide.

The Sunshine State attracted a net inflow of about $ 17.7 billion in adjusted gross income (AGI) – most of which (72%) was from people aged 55 and over. It is systematically one of the most popular destinations for retirees because of affordability and low taxes.

Florida’s $ 17.7 billion net AGI eclipses the remaining 19 states that saw positive net revenue inflows – which combined for a total of $ 19.4 billion.

South Carolina and another tax-free state – Texas – followed Florida, with adjusted net income of around $ 2.25 billion each.

Florida is unique in that it also attracts a large proportion of high net worth people – over 85% of its net income comes from people earning six figures or more.

On the other hand, New York City lost the largest adjusted gross income from migration, around $ 8.8 billion.

Another high-tax state, Connecticut, suffered the largest loss in revenue relative to its overall economy – at $ 2.6 billion. Connecticut, Pennsylvania, New Jersey, Illinois and New York lost about half of their income thanks to people earning more than $ 200,000, indicating that the rich were walking away.

As the study analyzed data from 2016, this trend has likely only intensified thanks to recent changes to the U.S. tax code. A $ 10,000 cap on state and local tax deductions caused an exodus from states like New York, Connecticut and California – where tax burdens were already heavy – to low-tax states like Florida , Texas and Nevada.

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Data from the US Census Bureau showed that while Florida received more movers than any other state last year, New York’s outflows to the Sunshine State were the highest – 63,772 people. New York had the third largest influx of any state, with 452,580 people relocating in the past year.

People who earn $ 650,000 can save more than $ 69,700 taxes per year when moving from New York to Florida.