New York and California lost more than $90 billion in income during the Covid-19 pandemic as high-earning residents relocated to states with lower tax environments.
According to a CNBC report that analyzed new data from the Internal Revenue Service, New York saw the loss of $25 billion in adjusted gross income due to outbound migration in 2021 – the state lost an additional $20 billion in 2020, when the pandemic paralyzed the nation. California reported a net loss of $29 billion in 2021, a significant increase from the $18 billion loss in 2020.
The income losses for California and New York in 2021 were more than three times their combined losses in pre-pandemic 2019. In comparison, the states that received the highest levels of pandemic-era inbound migration were big winners – especially Florida, which recorded $39 billion in income in 2021 on top of the $28 billion gained in 2020.
And while the Covid crisis is now in the rearview mirror, the damage it created is still resonating with California and New York – the states are projecting deficits of $24 billion and over $7 billion, respectively.
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