via naturalnews:
The reported tax revenues of New York and California are reeling as more and more people flee their respective states for more low-tax locales like Florida and Texas, both of which are consequently seeing surges in tax revenues.
This is according to data compiled by the Urban-Brookings Tax Policy Center, a Washingt0n, D.C.-based think tank which looked through data from tax revenue reports from the start of the fiscal year in October 2022 through April 2023. (Related: There are now more illegal immigrants than homeless people housed in New York City’s shelters.)
According to the data, New York’s tax revenue fell by 19.5 percent and California’s fell by a whopping 24.9 percent. Meanwhile, Florida’s tax revenue surged by nine percent and Texas’ tax revenue grew by 12.2 percent.
Taxes in Florida and Texas are primarily collected through sales taxes rather than from income taxes. While the pace of tax collections in both states has somewhat slowed, they are among a dozen other states – mostly Republican-controlled – that are seeing revenues grow by five percent or more this year as consumers flock to their states to keep spending.
New York and California have been losing money for years
The differing fortunes between states like New York and California to Florida and Texas are highlighting the growing divisions between the largest states, mostly controlled by members of the Democratic and Republican parties, respectively.
These divisions are growing ever quickly at a time when the leaders of the four states are competing more and more for businesses and people to either stay put or relocate to greener, less taxed pastures.
But New York and California have been losing this battle for years now. Data from the Internal Revenue Service shows that New York and California lost more than $90 billion in total income since 2020 as residents kept fleeing to areas where the cost of living is cheaper.
New York lost $25 billion in adjusted gross income in 2021 and $20 billion in 2020, while California lost $29 billion in 2021 and $18 billion in 2020, for a total of $92 billion in just two years.
Meanwhile, Texas’ increased state tax revenue this year alone has translated into a record $33 billion budget surplus, which has prompted Gov. Greg Abbott to seek further tax cuts.
And in Florida, the state brought in $39 billion in adjusted gross income in 2021 and $28 billion in 2020. In 2021, Palm Beach County alone reported an $11 billion increase in income.
Marc Goldwein, senior policy director of the think tank Committee for a Responsible Federal Budget, noted that California and New York saw their populations shrink by nearly 300,000 residents in the year through July 1, 2022, while Florida and Texas saw their populations skyrocket by nearly 890,000 residents collectively. This highlights how the tax bases of the four states are changing rapidly.
“Part of what’s going on is changes in population – people are moving,” said Goldwein. He added that another aspect is the reliance on capital gains taxes and other taxes from very high earners who have large fluctuations in their income. “So much of those capital gains are in California and New York, which are the center of tech and the center of finance, respectively.”
California’s personal income tax collections are its largest source of revenue, with about half of the collections coming from the top one percent of earners. This leaves the state especially susceptible to financial shocks if more top taxpayers leave, causing rippling effects that affect the rest of the state.
California is already expected to have a nearly $32 billion budget deficit, while New York is projected to experience a budget gap that will grow to $5.1 billion by the fiscal year 2025, $8.6 billion by the 2026 fiscal year and $7.2 billion by the next fiscal year for a total of nearly $21 billion.
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