Recent IRS data shows that over 2021 and 2022, there was a significant $24 billion loss in personal income due to Californians leaving the state for other states. Compared to those who moved into the state, the outgoing Californians were significantly wealthier and more likely to have dependents or joint filers, suggesting a pattern where wealthy families are leaving and less wealthy people are moving there to pursue the California lifestyle..
California lost 144,203 tax filers net during this time, which resulted in a substantial drop in the state’s adjusted gross income of $24 billion. The average adjusted gross income (AGI) of those departing was $130,946, and they were 38% more likely to have joint filers or dependents on their tax forms. By comparison, the average AGI of those who arrived was $111,689, which is around 15% less than that of those who left.
Expert in government finance and former state senator John Moorlach voiced worries on the implications for future revenue collections from California’s personal income tax. He pointed out that enterprises as a whole are also fleeing, in addition to individual employees, which might make the state’s economic problems worse.
More evidence of California’s corporate outmigration trend comes from statistics from the California Policy Center’s “California Book of Exoduses,” which shows that 304 businesses have left the state since January 2019.
California’s population has been growing again recently, according to Governor Gavin Newsom, as a result of higher immigration and lower outmigration. The financial data, however, highlights a trade-off in which the state gains lower-income people while losing higher-income households.