Yeah, wealth has legs, and we increasingly have this wealth meta-economy where different states are good at producing wealthy people (CA, NY) and different states are good at giving them a hospitable place to live. Sources and sinks.
This is probably good in some sense - you can argue that it's not healthy for states like CA to "own" so much of GDP end-to-end - but I wonder where this leads us in a couple of decades. Does it continue to be like this, or does it mean that more tech hubs pop up elsewhere because in the long haul, people probably prefer to work and invest close to home?
A big problem is that some of these places - e.g., Wyoming - don't have the higher-ed infrastructure that would foster new startups and high-tech research. On the flip side, California is now importing most of its entrepreneurs anyway.
They're not 'hospitable,' they're 'advantageous' due to being lower tax rates. If anything, lower tax rates make places less 'hospitable' in the long run.
That’s not true. For example, Washington State has no corporate tax: https://taxfoundation.org/data/all/state/state-corporate-inc.... But companies aren’t exactly flocking there. Florida meanwhile is seeing a huge boom, but its corporate taxes are around the middle of the pack. California has always had pretty high marginal tax rates, even back in the 1970s when it was a solid red state. It used that money to do things like make big investments in higher education.
Being hospitable is more about whether the state makes it a pain in the ass to do business.
Taxes are the least worst part of doing business. It's all the other subjectively defined and capriciously enforced regulatory BS that drives business away. You can't run a business let alone get financing to create one when a huge chunk of your costs are a question mark.
The type of people who move from CA to WY for the tax benefits are the type of people who pay more taxes than they use in government services (even with very low tax rates). That means WY can offer more government services to the rest of its residents, making it more hospitable.
> who pay more taxes than they use in government services (even with very low tax rates)
They rely massively on government services. They depend on an educated workforce. They depend on law and order to prevent their workplaces from bandits. They depend on massive navies that allow goods to be shipped across the world without concern. They depend on courts to enforce contracts so that they can build their business on contracts rather than having to establish personal trust with everybody they do business with. They depend on a stable currency. They depend on a regulated finance market. They depend on a massive pacified customer base.
I've only scratched the surface, there's lots more.
>The type of people who move from CA to WY for the tax benefits are the type of people who pay more taxes than they use in government services (even with very low tax rates).
Ah yes, the government services the people will need after these locusts move in and price generations of locals out of their homes.
Not always. Low tax can allow enough economic activity as to bring in more income than higher taxes. This is most obvious when you take a tax rate of 90% and reduce it, and there is big debate on where it breaks down when rates are already lower.
A state can justify and sustain higher taxes on the wealthy by offering government services which indirectly benefit the wealthy (the externalities you mention). But it doesn’t follow that an arbitrarily poorly-ran government can sustain arbitrarily high taxes on the wealthy.
There’s some manifold of Pareto-optimal solutions to the problem of taxes and services.
California, for example, spends a lot of money to get not-great public schools, and has housing costs that are out of control. So if you’re importing new hires from other states, and pay them a lot to live here, and personally pay high taxes on top of that… that doesn’t seem like a Pareto-optimal point.
At some point, the wealthy will decide to move someplace that looks more Pareto-optimal. Better externalities, lower taxes, or both.
FTA: For years, policymakers and economists have debated the shape and peak of the Laffer curve, a theoretical model suggesting that if top tax rates increase beyond a certain point—called the revenue-maximizing rate—they will yield negative marginal revenue.
A new paper from economists at the Joint Committee on Taxation finds that the Laffer curve is flatter than previous theories have suggested, meaning the revenue-maximizing “rate” might be a broad range rather than a single point.
Lawmakers looking to raise taxes might find it difficult to raise substantial revenue from top rate increases; however, broadening the base, examining untaxed sectors, and reducing the tax gap represent promising pathways to closing the gap between revenue and spending.
---
I'm glad they highlighted that instead of increasing the tax rate, broaden the tax base. For example, if they treated borrow-spend-die as income. We could keep a lower tax rate. The same argument could be made for eliminating the estate tax. Treat inheritances as income for tax purposes.
Those states will eventually either kill the golden goose or make themselves unattractive for the next big industry. California for most of the 20th century was a place where the government was well managed and efficient, wasn’t afraid to make big investments in infrastructure and education, and made it easy to build stuff without too much hassle. Texas and Florida kind of fit that niche today, but both are a shadow of what California used to be.
Wyoming is an interesting case with Higher Ed. It's actually the legislature that runs UW. There isn't a regent board or some such thing. Hence, with many other priorities, the Cowboys don't get that much time in the minds of their bosses.
It's one of the many many wrinkles that come along with the many college football issues these days. Any formation of a players union or draft or much of any real professionalization of the sport has to go through so many different governance formations (regents, governors, the Catholic Church, etc). As such, the many issues with college ball are likely to continue for a long time and fester.
California imports it's current entrepreneurs because it chased the previous generations of them away. I was a fourth generation Californian, was...
I know one literally one person in my highschool graduating class who stayed behind.
Sure the older generation are still left for the most part, still not admitting they did anything to cause the situation, but the young and ambitious have all left.
Think about that the fact that the entire population of a place has basically been replaced in under a generation, and with people who are chasing dollars and clout not people who are building communities. (And no this isn't about immigrants, Cali was always full of people from everywhere, it's about the personality that it attracts now.)
We all left and built other communities and business elsewhere because the place quite clearly told us we were not wanted there.
I'm not sure why people keep repeating fabricated GDP like it's some measure of success, especially when its completly measured on non-tangible products like the California economy.
Cali compared to Cali 40/50/100 years ago is wasteland and it pisses me off every day.
Make money here but wait until death to have it declared over there is unsustainable, it's a global problem.
This is going to sound wild - but hear me out: you pay taxes in equity the moment you get it.
'Shares are income' - so you got 1M shares in a company you made, the tax is, 1/3 or whatever - and then you never pay taxes on cap gains from that again.
You might be able to control liquidity, but when it's liquid it goes to the state etc..
That way taxes are captured appropriately and where wealth is created.
It just feels extra odd that you incorporate a company and immediatley gov. gets 1/2 or whatever - but that is the case the moment it goes into your pocket as $ anyhow.
Maybe I’m misunderstanding your suggestion, but shares are already treated as ordinary income when they vest (when the shares are released to you and you first gain the right to sell them).
If a company pays you $1M of shares, the IRS treats it exactly the same as if you were paid $1M of cash and you used it to buy the shares. The capital gains work the same too: you pay capital gains tax on the difference in value between when you receive the shares and when you sell them. That’s how it already works.
So if your company gives you something worth 1M, then yes, you have to pay taxes right there, that's not what I mean, I mean on the cap gains.
A company gives you options but at market value, they are worth $0 when they give them to you, just like if you incorporate a company, shares are worth some nominal amount.
You give the equity - not the realized gains later.
The problem with cap gains is they are deferred. Musk takes loans against his equity and never pays taxes.
Musk can move to the lowest tax regime, pay taxes on massive cap gains, and then move somewhere else. That's bad.
To avoid that, the equity is allocated instead of the cash and it's allocated at the start, not the end. Or in the relevant locale.
It means he owes state of Cali 1/3 of SpaceX, irrespective of where he moves.
Another way to do it, would be to make people pay up when they change tax domicile.
So if Musk moves from Cali to Texas, he has to pay his tax bill on the way out at 'market rates'. And he's 'zeroed out' when he moves to Texas. Any further gains made in TX, he pays in TX.
That becomes a problem with private ownership etc.
That depends on your audience. If you want to move somewhere that's about to have an influx of income tax, you'd head to the states with higher income tax rates + income inflows. For actual wealth migration, that's probably a lot more ephemeral since sales tax tends to be regressive and the wealthy keep their money in investments.
I think Ohio, Pennsylvania, and Virginia are the more interesting states. These are affordable places with solid job opportunities. So I think job migration is more complicated than just cost of living and taxes.
Also, it would be interesting to see these absolute figures as a percentage of overall income.
What stands out to me: the #1 (FL) over 3x the inflow of the #2 (TX). Both are large southern coastal states with no state income tax. What's Florida got that's that much more attractive?
I was under the impression a big part of it relates to Florida bankruptcy law allowing individuals to discharge debts without losing a significant amount of their assets.
At a glance, it looks like Chapter 7 bankruptcy is what I was remembering. There are significant exemptions for property, and the more recent amendments to the law to protect against abuse by wealthy individuals are laughably based on income.
It looks pretty easy to buy up a bunch of property in Florida, live there for two years to become eligible for the property exemptions, then declare Chapter 7 to wipe away outstanding debts with minimal-to-no losses.
Of course, respondents are free to correct me if I've misinterpreted something. My initial thought was based on hearsay, and my interpretation was based off quick skimming :)
FL is the same timezone as NY, and closer to fly to, and a non-trivial percent have moved only in terms of tax residency, not in terms of how they live their life. In practice "wealth moved to Florida" in these cases is "wealthy people have a home there as part of their overall portfolio of properties."
For a cohort of people who are on the road for work 25% of the time and/or own 2-5 homes, the concept of primary residence is mostly just a legal term. Can they sign a tax return to NYS/NYC tax authorities that they spent 183 days outside the state/city? Lots of people cheat on their taxes.
Therefore there's a wide spectrum of gray in terms of rich NYers "moving to Florida".
First guy I talked to at an NYC tech conference yesterday gave me a business card with his Miami work address (and NYC phone number..) after spending 5 minutes talking about how lived in the same NYC hood.
I know several NYers at/near retirement who plan to: sell NYC primary residence, buy a residence in Florida (change IDs, etc), then after 1 year of seasoning rent back a place in NYC they plan to spend as close to the 182 days/year in NYC that keeps them in tax compliance.
I was actually just going to ask this same question. Florida has astronomical home insurance rates due to hurricanes. I'm surprised to see wealthy people moving there given that they'll probably own property and pay an exorbitant premium for insurance. It seems like a bad investment if nothing else.
Florida has a problem with insurance fraud, which is what drives the rates up. If you can afford to self-insure, the expectation value of doing that is much better than the EV of using a commercial insurer (who has to price in the risk that you are an insurance fraudster)
I borrowed privately in 2006 to pay off the last 20 K of my 50 K mortgage.
Then dropped my insurance which was asking 5K a year - previously about 1 K. I am betting most wealthy folks build resilient structures and carry minimal insurance. If you can cover the costs easily, why pay for the administration and profit of the insurance companies. -- South Florida here. Direct hits from Francis and Jeane, Wilma was milder, but a spun off tornado took the roof off my business.
Generally speaking, you'll pay twice as much in premiums as you would just paying for the damage. Therefore, if you can afford the damage, you don't need to buy insurance.
For example, I don't carry collision insurance for my car. Over the years, I've saved enough on that that totaling the car still leaves me ahead financially.
It's why I don't buy such things as appliance insurance.
I moved here when rocks were young because my (soon to be ex) wife moved here with my son. Since then, I have grown to love being near the ocean - about 5 minutes, and I also love the being able to grow things all year long. Admittedly, part of the reason I stay is inertia, once I have a nice rut, i tend to furnish it.
Perhaps those home owners who are confident that their home is hurricane-proof don't buy that insurance, leaving the rest (who don't have hurricane-proof homes or are not confident) with higher premiums?
If you choose to live in a high hazard area, you're going to have to pay for it one way or another. It's cheaper to do some hurricane upgrades to your home.
Just like if you live in a fire hazard area, it's cheaper to spend a few bucks clearing the vegetation away from your house, investing in a metal roof, etc. When my asphalt roof wore out, I had it replaced with a metal one. Very happy with it.
If you choose to live on a flood zone, either put your house on stilts, or on a mound, or accept that it's going to get flooded. My dad lived in the midwest, and consulted flood maps when looking for a house. Never got flooded. Washington is subject to earthquakes, and I hired a soil geologist to screen the property for slide risk.
If a large tree is close to your house on the windward side, hire an arborist to trim back the "sail" on it, or just have it removed.
Having lived through several natural disasters I can tell you that even if your house survives, it absolutely sucks when everything else gets trashed. Depending on the disaster, it may also include things like ruining the water supply.
If you're wealthy enough or can pay cash for a modest property, you self insure. The only folks who cannot afford it are those who need a mortgage (requiring hazard/hurricane insurance) and cannot carry the monthly payment for the mortgage, taxes, and insurance (which can be upwards of $3k-$4k/month at current real estate price levels, even with a generous down payment).
Its a bad investment for your average homeowner considering forward curve of equity return and carrying costs, but its the cost of lifestyle if you're wealthy.
I think it's a bad investment for everyone, since these people will eat the loss from the inevitable hurricane out of their own pocket. I guess if you're rich enough you don't care? What about Florida would make people pay such a premium to live there?
You'd have to ask them, I left based on the forward curves I describe. It ain't gonna get better, only worse and how fast.
From my Axios citation in a sibling comment:
- "The changing affordability situation has led to a shrinking supply of working-age newcomers, who are key to filling jobs and stoking demand for housing, retail and services," the piece says.
- "Florida depends heavily on such sectors, as it lacks big industries that generate an abundance of high-paying jobs."
It's the ocean and beaches. Arizona is getting popular because it's dry. Florida also has tropical weather which many like except for the extreme humidity.
Used to be cost of living for the average person, now its network effect and maybe beaches for the wealthy. Both Texas and Florida have generous creditor protections, but Texas lets you keep up to two horses, mules, or donkeys with food and riding equipment too (which is kinda cool in a state that has very little else going for it).
This looks like it's capturing how wealth is shifting around from people moving. But how does this net out with changes in wealth / income / whatever from people who stayed put? It'd be very interesting to learn that California was actually contracting, but while this data presentation suggests it, that's not what's actually here....
The number by itself is meaningless. There's a massive difference between migration of a million middle-class households and one deca-billionaire changing where his primary home was registered.
I doubt they modeled the net outflows of capital from the retirement zones each year as estates get settled. Though I did see a claim of increasing GDPs in those inbound states.
This is a little misleading as written (with a 2026 timestamp but citing only 2023 data) given there is a wealth tax on the California ballot and wealth migration is cited as a reason to oppose it. This article looks like it supports that argument, but it doesn't.
What is the age of the average Florida 2026 transplant? Couldn’t this just be near-retiree boomers moving to Florida, which doesn’t really indicate much?
What are these numbers compared to years prior? Do they fluctuate, or are they a continuous trend?
How much of the California and Texas numbers are caused by a small number of individuals (the Elon effect)?
Florida is a great state to declare bankruptcy in as they have a homestead exemption so they don't take your house. If you're a piece of shit that runs scammy businesses this a great place to move to.
Overall this isn't really a bad thing - if people want to vote with their feet then have at it. California continues to be a nice place to live and do business (non-competes) so I'm sure people will continue to live there. Everyone else can have Texas, Florida, and Tennessee and all of the, uh, benefits of living in those places and interacting with those state and local governments.
Just bout every state has a homestead exemption but IIRC Florida's is one of the few/only where it's unlimited on your primary residence so you "lock in" all your gainz by moving there before the "oops I'm bankrupt" drops.
A majority of California's budget problems come from trying to absorb what should be a federally handled expense. Medi-Cal is what Medicaid should be across the board. But they end up in the classic trap for US states, which is to say you have all of the problems of a major country but none of the stickiness to the tax base like one, making it impossible to sustain these things long term.
People vote with their feet. This shouldn't be a negative. Some people don't want to be over taxed and over regulated in places like CA and NY, so they move to states they see as fitting their needs/culture better.
What we really need is a federal law that says states can't entice businesses to move or stay in some place using monetary bribes in the form of company-specific tax cuts. Reducing this manipulation could help tax revenues instead of states competing to be lowest bidder.
There's been this idea going around that a billionaire has to keep owning taxes just for being a billionaire. After they already paid income tax on that money.
Consider the idea of income tax. You get paid. You pay tax. The money after that is yours. Billionaires have the same thing. They make a lot early and then "retire" but then people still look at their bank account and want more years later. This idea that a billionaire has no income years later seems unfair to people even though really it makes all the sense in the world. They don't need income anymore. Duh. They already paid all the income taxes on it years prior.
So yes they will absolutely leave. And then yes you will have a massive budget hole. And then your taxes will go up because the state got greedy.
I think you're ignoring the role of capital gains taxes, borrowing against assets, offshore tax shelters, outsized political influence, and the cannibalization of public good for private gain.
many billionaires don't pay income (wages) tax because they come from family money inheritance and income is from investments or maybe shares of companies they head, rather than wages, on which to pay income tax. And income tax from shares and capital gains is less than wages tax. I agree they shouldn't be taxed twice, but the way we are taxed is not straight-forward.
Affordability can still matter for rich people. Isolated rich areas end up being very artificial, which is maybe not the environment they want to live in. Or maybe they're raising families. They might want to be somewhere their children can afford once they become adults without having to rely on their parents.
> They might want to be somewhere their children can afford once they become adults
This one was a major factor for me when I escaped from California. I could afford to live there, but my kids would have a hard time following my life path for a number of reasons. I moved to a state where the family as a whole could have a future.
This didn't chase me and my wife from California, but it did chase us from the Bay Area for certain. I entered the workforce as a SWE at an incredibly lucky time.
If you genuinely think that California or New York are anywhere even approaching "communism" then I have to question where you got that information, and for that matter your definition of "communism".
Good. Who cares? Billionaires in California created <3% of the jobs and now that they're gone, that's a niche small business owners can fill right back up. Hooray!
The sooner we treat billionaires as cost centers the better.
Clearly before we were against single engineer unicorns we were for them. Then the billionaires fled in terror...
TLDR: F*** billionaires
Edit: single commas think they're gonna be three commas by enabling them. Tee hee. They'll see. Oh wait, it's 2026, they'll never learn, the Singularity will happen first.
Yeah, wealth has legs, and we increasingly have this wealth meta-economy where different states are good at producing wealthy people (CA, NY) and different states are good at giving them a hospitable place to live. Sources and sinks.
This is probably good in some sense - you can argue that it's not healthy for states like CA to "own" so much of GDP end-to-end - but I wonder where this leads us in a couple of decades. Does it continue to be like this, or does it mean that more tech hubs pop up elsewhere because in the long haul, people probably prefer to work and invest close to home?
A big problem is that some of these places - e.g., Wyoming - don't have the higher-ed infrastructure that would foster new startups and high-tech research. On the flip side, California is now importing most of its entrepreneurs anyway.
They're not 'hospitable,' they're 'advantageous' due to being lower tax rates. If anything, lower tax rates make places less 'hospitable' in the long run.
That’s not true. For example, Washington State has no corporate tax: https://taxfoundation.org/data/all/state/state-corporate-inc.... But companies aren’t exactly flocking there. Florida meanwhile is seeing a huge boom, but its corporate taxes are around the middle of the pack. California has always had pretty high marginal tax rates, even back in the 1970s when it was a solid red state. It used that money to do things like make big investments in higher education.
Being hospitable is more about whether the state makes it a pain in the ass to do business.
>But companies aren’t exactly flocking there.
Taxes are the least worst part of doing business. It's all the other subjectively defined and capriciously enforced regulatory BS that drives business away. You can't run a business let alone get financing to create one when a huge chunk of your costs are a question mark.
Slow permitting is the other thing.
The type of people who move from CA to WY for the tax benefits are the type of people who pay more taxes than they use in government services (even with very low tax rates). That means WY can offer more government services to the rest of its residents, making it more hospitable.
It is a fiscal detriment to CA and NY though.
> who pay more taxes than they use in government services (even with very low tax rates)
They rely massively on government services. They depend on an educated workforce. They depend on law and order to prevent their workplaces from bandits. They depend on massive navies that allow goods to be shipped across the world without concern. They depend on courts to enforce contracts so that they can build their business on contracts rather than having to establish personal trust with everybody they do business with. They depend on a stable currency. They depend on a regulated finance market. They depend on a massive pacified customer base.
I've only scratched the surface, there's lots more.
I thought it was obvious that I speaking about marginal use of government services.
When a billionaire moves to Wyoming, the marginal tax revenue is far greater than the marginal cost of police services, for example.
>The type of people who move from CA to WY for the tax benefits are the type of people who pay more taxes than they use in government services (even with very low tax rates).
Ah yes, the government services the people will need after these locusts move in and price generations of locals out of their homes.
> lower tax rates make places less 'hospitable' in the long run
When Washington was a low tax state, it spawned Amazon, Microsoft, Boeing, Starbucks, Costco, Nordstrom, T Mobile, Expedia, etc.
Not always. Low tax can allow enough economic activity as to bring in more income than higher taxes. This is most obvious when you take a tax rate of 90% and reduce it, and there is big debate on where it breaks down when rates are already lower.
Ultimately, not every place can have low taxes and a higher-than-average density of rich people. This model requires externalities.
A state can justify and sustain higher taxes on the wealthy by offering government services which indirectly benefit the wealthy (the externalities you mention). But it doesn’t follow that an arbitrarily poorly-ran government can sustain arbitrarily high taxes on the wealthy.
There’s some manifold of Pareto-optimal solutions to the problem of taxes and services.
California, for example, spends a lot of money to get not-great public schools, and has housing costs that are out of control. So if you’re importing new hires from other states, and pay them a lot to live here, and personally pay high taxes on top of that… that doesn’t seem like a Pareto-optimal point.
At some point, the wealthy will decide to move someplace that looks more Pareto-optimal. Better externalities, lower taxes, or both.
I recognize that billionaire talking point. It's the argument behind the Laffer curve.
https://bipartisanpolicy.org/issue-brief/what-a-new-laffer-c...
FTA: For years, policymakers and economists have debated the shape and peak of the Laffer curve, a theoretical model suggesting that if top tax rates increase beyond a certain point—called the revenue-maximizing rate—they will yield negative marginal revenue.
A new paper from economists at the Joint Committee on Taxation finds that the Laffer curve is flatter than previous theories have suggested, meaning the revenue-maximizing “rate” might be a broad range rather than a single point.
Lawmakers looking to raise taxes might find it difficult to raise substantial revenue from top rate increases; however, broadening the base, examining untaxed sectors, and reducing the tax gap represent promising pathways to closing the gap between revenue and spending.
---
I'm glad they highlighted that instead of increasing the tax rate, broaden the tax base. For example, if they treated borrow-spend-die as income. We could keep a lower tax rate. The same argument could be made for eliminating the estate tax. Treat inheritances as income for tax purposes.
Those states will eventually either kill the golden goose or make themselves unattractive for the next big industry. California for most of the 20th century was a place where the government was well managed and efficient, wasn’t afraid to make big investments in infrastructure and education, and made it easy to build stuff without too much hassle. Texas and Florida kind of fit that niche today, but both are a shadow of what California used to be.
> e.g., Wyoming
Wyoming is an interesting case with Higher Ed. It's actually the legislature that runs UW. There isn't a regent board or some such thing. Hence, with many other priorities, the Cowboys don't get that much time in the minds of their bosses.
It's one of the many many wrinkles that come along with the many college football issues these days. Any formation of a players union or draft or much of any real professionalization of the sport has to go through so many different governance formations (regents, governors, the Catholic Church, etc). As such, the many issues with college ball are likely to continue for a long time and fester.
California imports it's current entrepreneurs because it chased the previous generations of them away. I was a fourth generation Californian, was...
I know one literally one person in my highschool graduating class who stayed behind. Sure the older generation are still left for the most part, still not admitting they did anything to cause the situation, but the young and ambitious have all left.
Think about that the fact that the entire population of a place has basically been replaced in under a generation, and with people who are chasing dollars and clout not people who are building communities. (And no this isn't about immigrants, Cali was always full of people from everywhere, it's about the personality that it attracts now.)
We all left and built other communities and business elsewhere because the place quite clearly told us we were not wanted there.
I'm not sure why people keep repeating fabricated GDP like it's some measure of success, especially when its completly measured on non-tangible products like the California economy.
Cali compared to Cali 40/50/100 years ago is wasteland and it pisses me off every day.
Personally I'd much rather live in the places where wealth is created, instead of the resorts where wealthy people retire to enjoy a life of leisure
") and different states are good at giving them a hospitable place to live"
Every state offers wealthy people a good place to live - the suggestion that somehow this is a trade off is very wrong.
This has a lot to do with taxes.
Personally I’d be happy to pay the higher CA taxes if the state was more hospitable and the government was performant.
But it’s not, and that doesn’t feel worth it.
Absolutely nobody is moving to Florida or any other state frankly because of how effective they perceive the governance.
Vermont has effective governance. Probably so does Mass. That's not why people go there.
Make money here but wait until death to have it declared over there is unsustainable, it's a global problem.
This is going to sound wild - but hear me out: you pay taxes in equity the moment you get it.
'Shares are income' - so you got 1M shares in a company you made, the tax is, 1/3 or whatever - and then you never pay taxes on cap gains from that again.
You might be able to control liquidity, but when it's liquid it goes to the state etc..
That way taxes are captured appropriately and where wealth is created.
It just feels extra odd that you incorporate a company and immediatley gov. gets 1/2 or whatever - but that is the case the moment it goes into your pocket as $ anyhow.
Maybe I’m misunderstanding your suggestion, but shares are already treated as ordinary income when they vest (when the shares are released to you and you first gain the right to sell them).
If a company pays you $1M of shares, the IRS treats it exactly the same as if you were paid $1M of cash and you used it to buy the shares. The capital gains work the same too: you pay capital gains tax on the difference in value between when you receive the shares and when you sell them. That’s how it already works.
I mean no cap gains.
So if your company gives you something worth 1M, then yes, you have to pay taxes right there, that's not what I mean, I mean on the cap gains.
A company gives you options but at market value, they are worth $0 when they give them to you, just like if you incorporate a company, shares are worth some nominal amount.
You give the equity - not the realized gains later.
The problem with cap gains is they are deferred. Musk takes loans against his equity and never pays taxes.
Musk can move to the lowest tax regime, pay taxes on massive cap gains, and then move somewhere else. That's bad.
To avoid that, the equity is allocated instead of the cash and it's allocated at the start, not the end. Or in the relevant locale.
It means he owes state of Cali 1/3 of SpaceX, irrespective of where he moves.
Another way to do it, would be to make people pay up when they change tax domicile.
So if Musk moves from Cali to Texas, he has to pay his tax bill on the way out at 'market rates'. And he's 'zeroed out' when he moves to Texas. Any further gains made in TX, he pays in TX.
That becomes a problem with private ownership etc.
That chart is extremely confusing because it mixes up income and wealth, which are two different things.
That depends on your audience. If you want to move somewhere that's about to have an influx of income tax, you'd head to the states with higher income tax rates + income inflows. For actual wealth migration, that's probably a lot more ephemeral since sales tax tends to be regressive and the wealthy keep their money in investments.
I think Ohio, Pennsylvania, and Virginia are the more interesting states. These are affordable places with solid job opportunities. So I think job migration is more complicated than just cost of living and taxes.
Also, it would be interesting to see these absolute figures as a percentage of overall income.
Would love to see this split by age groups. This feels like it’s showing where retirees are moving
What stands out to me: the #1 (FL) over 3x the inflow of the #2 (TX). Both are large southern coastal states with no state income tax. What's Florida got that's that much more attractive?
I was under the impression a big part of it relates to Florida bankruptcy law allowing individuals to discharge debts without losing a significant amount of their assets.
See: https://www.floridabar.org/public/consumer/pamphlet008/
At a glance, it looks like Chapter 7 bankruptcy is what I was remembering. There are significant exemptions for property, and the more recent amendments to the law to protect against abuse by wealthy individuals are laughably based on income.
It looks pretty easy to buy up a bunch of property in Florida, live there for two years to become eligible for the property exemptions, then declare Chapter 7 to wipe away outstanding debts with minimal-to-no losses.
Of course, respondents are free to correct me if I've misinterpreted something. My initial thought was based on hearsay, and my interpretation was based off quick skimming :)
FL is the same timezone as NY, and closer to fly to, and a non-trivial percent have moved only in terms of tax residency, not in terms of how they live their life. In practice "wealth moved to Florida" in these cases is "wealthy people have a home there as part of their overall portfolio of properties."
For a cohort of people who are on the road for work 25% of the time and/or own 2-5 homes, the concept of primary residence is mostly just a legal term. Can they sign a tax return to NYS/NYC tax authorities that they spent 183 days outside the state/city? Lots of people cheat on their taxes.
Therefore there's a wide spectrum of gray in terms of rich NYers "moving to Florida".
First guy I talked to at an NYC tech conference yesterday gave me a business card with his Miami work address (and NYC phone number..) after spending 5 minutes talking about how lived in the same NYC hood.
I know several NYers at/near retirement who plan to: sell NYC primary residence, buy a residence in Florida (change IDs, etc), then after 1 year of seasoning rent back a place in NYC they plan to spend as close to the 182 days/year in NYC that keeps them in tax compliance.
I was actually just going to ask this same question. Florida has astronomical home insurance rates due to hurricanes. I'm surprised to see wealthy people moving there given that they'll probably own property and pay an exorbitant premium for insurance. It seems like a bad investment if nothing else.
Florida has a problem with insurance fraud, which is what drives the rates up. If you can afford to self-insure, the expectation value of doing that is much better than the EV of using a commercial insurer (who has to price in the risk that you are an insurance fraudster)
I borrowed privately in 2006 to pay off the last 20 K of my 50 K mortgage. Then dropped my insurance which was asking 5K a year - previously about 1 K. I am betting most wealthy folks build resilient structures and carry minimal insurance. If you can cover the costs easily, why pay for the administration and profit of the insurance companies. -- South Florida here. Direct hits from Francis and Jeane, Wilma was milder, but a spun off tornado took the roof off my business.
Generally speaking, you'll pay twice as much in premiums as you would just paying for the damage. Therefore, if you can afford the damage, you don't need to buy insurance.
For example, I don't carry collision insurance for my car. Over the years, I've saved enough on that that totaling the car still leaves me ahead financially.
It's why I don't buy such things as appliance insurance.
Congrats on paying off your mortgage. Can I ask what it is about Florida that you find attractive versus places that don't have hurricanes?
I moved here when rocks were young because my (soon to be ex) wife moved here with my son. Since then, I have grown to love being near the ocean - about 5 minutes, and I also love the being able to grow things all year long. Admittedly, part of the reason I stay is inertia, once I have a nice rut, i tend to furnish it.
> Florida has astronomical home insurance rates due to hurricanes.
That puzzles me because people have figured out how to build hurricane proof homes there, and it's neither hard nor expensive.
Perhaps those home owners who are confident that their home is hurricane-proof don't buy that insurance, leaving the rest (who don't have hurricane-proof homes or are not confident) with higher premiums?
If you choose to live in a high hazard area, you're going to have to pay for it one way or another. It's cheaper to do some hurricane upgrades to your home.
Just like if you live in a fire hazard area, it's cheaper to spend a few bucks clearing the vegetation away from your house, investing in a metal roof, etc. When my asphalt roof wore out, I had it replaced with a metal one. Very happy with it.
If you choose to live on a flood zone, either put your house on stilts, or on a mound, or accept that it's going to get flooded. My dad lived in the midwest, and consulted flood maps when looking for a house. Never got flooded. Washington is subject to earthquakes, and I hired a soil geologist to screen the property for slide risk.
If a large tree is close to your house on the windward side, hire an arborist to trim back the "sail" on it, or just have it removed.
Having lived through several natural disasters I can tell you that even if your house survives, it absolutely sucks when everything else gets trashed. Depending on the disaster, it may also include things like ruining the water supply.
If you're wealthy enough or can pay cash for a modest property, you self insure. The only folks who cannot afford it are those who need a mortgage (requiring hazard/hurricane insurance) and cannot carry the monthly payment for the mortgage, taxes, and insurance (which can be upwards of $3k-$4k/month at current real estate price levels, even with a generous down payment).
Its a bad investment for your average homeowner considering forward curve of equity return and carrying costs, but its the cost of lifestyle if you're wealthy.
I think it's a bad investment for everyone, since these people will eat the loss from the inevitable hurricane out of their own pocket. I guess if you're rich enough you don't care? What about Florida would make people pay such a premium to live there?
You'd have to ask them, I left based on the forward curves I describe. It ain't gonna get better, only worse and how fast.
From my Axios citation in a sibling comment:
- "The changing affordability situation has led to a shrinking supply of working-age newcomers, who are key to filling jobs and stoking demand for housing, retail and services," the piece says.
- "Florida depends heavily on such sectors, as it lacks big industries that generate an abundance of high-paying jobs."
East Coast Migration To Miami Plummets As Florida Housing Costs Skyrocket - https://nypost.com/2026/10/07/real-estate/east-coast-migrati... - October 7th, 2026
Florida migration slowed sharply in 2025, with mid-sized counties continuing to grow - https://news.ufl.edu/2026/07/florida-migration/ - July 13th, 2026
Amid Cost-of-Living Concerns, Net Domestic Migration to Florida Dramatically Slows for Young Adults - https://pioneerinstitute.org/amid-cost-of-living-concerns-ne... - July 9th, 2026
(Florida real estate houses on the market and price direction/velocity is a leading indicator of demand imho)
Ha, I type to slow :)
It's a retirement destination for elderly people from the northeast?
Florida is always #1 because it's the preferred destination of retirees. Old people have more money.
It's sunny. As people get older they want the warmer weather. It's the retirement area of the US.
I'm a snow person that could not imagine life without 4 seasons, but as I get older I'm starting to 'get it' a bit.
It also doesn't take a lot of people for those transfers to show up in big numbers.
But why Florida? There's a ton of warm, sunny places in the US that don't have hurricanes and high insurance premiums.
It's the ocean and beaches. Arizona is getting popular because it's dry. Florida also has tropical weather which many like except for the extreme humidity.
It's very different than the south or west texas.
Sea-front, or mid-sea properties for most of the state.
Used to be cost of living for the average person, now its network effect and maybe beaches for the wealthy. Both Texas and Florida have generous creditor protections, but Texas lets you keep up to two horses, mules, or donkeys with food and riding equipment too (which is kinda cool in a state that has very little else going for it).
Florida migration boom fades as rising costs push residents out - https://www.axios.com/local/tampa-bay/2026/04/24/florida-aff... - April 24th, 2026
Per Apollo Group, ~31% of wealth is owned by the 70+ cohort, and they move to the sunbelt to retire and die usually.
31% of Wealth Owned by People Over 70 - https://www.apolloacademy.com/31-percent-of-wealth-owned-by-... - December 7th, 2025
~230k people die every year in Florida for reference.
https://usafacts.org/answers/what-are-the-leading-causes-of-...
(overall, ~2M people 55+ die every year in the US, ~5k per day)
This looks like it's capturing how wealth is shifting around from people moving. But how does this net out with changes in wealth / income / whatever from people who stayed put? It'd be very interesting to learn that California was actually contracting, but while this data presentation suggests it, that's not what's actually here....
The number by itself is meaningless. There's a massive difference between migration of a million middle-class households and one deca-billionaire changing where his primary home was registered.
I doubt they modeled the net outflows of capital from the retirement zones each year as estates get settled. Though I did see a claim of increasing GDPs in those inbound states.
... in 2023.
This is a little misleading as written (with a 2026 timestamp but citing only 2023 data) given there is a wealth tax on the California ballot and wealth migration is cited as a reason to oppose it. This article looks like it supports that argument, but it doesn't.
Useless data without context.
What is the age of the average Florida 2026 transplant? Couldn’t this just be near-retiree boomers moving to Florida, which doesn’t really indicate much?
What are these numbers compared to years prior? Do they fluctuate, or are they a continuous trend?
How much of the California and Texas numbers are caused by a small number of individuals (the Elon effect)?
Florida is a great state to declare bankruptcy in as they have a homestead exemption so they don't take your house. If you're a piece of shit that runs scammy businesses this a great place to move to.
Overall this isn't really a bad thing - if people want to vote with their feet then have at it. California continues to be a nice place to live and do business (non-competes) so I'm sure people will continue to live there. Everyone else can have Texas, Florida, and Tennessee and all of the, uh, benefits of living in those places and interacting with those state and local governments.
Just bout every state has a homestead exemption but IIRC Florida's is one of the few/only where it's unlimited on your primary residence so you "lock in" all your gainz by moving there before the "oops I'm bankrupt" drops.
It's worse than that..
the numbers in the chart, for instance, are from 2023.
A majority of California's budget problems come from trying to absorb what should be a federally handled expense. Medi-Cal is what Medicaid should be across the board. But they end up in the classic trap for US states, which is to say you have all of the problems of a major country but none of the stickiness to the tax base like one, making it impossible to sustain these things long term.
People vote with their feet. This shouldn't be a negative. Some people don't want to be over taxed and over regulated in places like CA and NY, so they move to states they see as fitting their needs/culture better.
What we really need is a federal law that says states can't entice businesses to move or stay in some place using monetary bribes in the form of company-specific tax cuts. Reducing this manipulation could help tax revenues instead of states competing to be lowest bidder.
Pretty sure Medicaid is funded by both. California expanded it to cover more, probably because of the wealth inequality in that state.
So, the source of the problem isn't federal, its wealth inequality.
Wall street and silicon valley folks are not as well liked outside those bubbles as those in the bubbles might think...
my friends in the bay area always say. Its good that bunch of losers are moving out.
Really pisses me off.
>Americans aren’t just moving, they’re bringing billions in wealth with them. (...) These inflows aren’t just large—they’re high-income.
AI slop everywhere.
There's been this idea going around that a billionaire has to keep owning taxes just for being a billionaire. After they already paid income tax on that money.
Consider the idea of income tax. You get paid. You pay tax. The money after that is yours. Billionaires have the same thing. They make a lot early and then "retire" but then people still look at their bank account and want more years later. This idea that a billionaire has no income years later seems unfair to people even though really it makes all the sense in the world. They don't need income anymore. Duh. They already paid all the income taxes on it years prior.
So yes they will absolutely leave. And then yes you will have a massive budget hole. And then your taxes will go up because the state got greedy.
I think you're ignoring the role of capital gains taxes, borrowing against assets, offshore tax shelters, outsized political influence, and the cannibalization of public good for private gain.
many billionaires don't pay income (wages) tax because they come from family money inheritance and income is from investments or maybe shares of companies they head, rather than wages, on which to pay income tax. And income tax from shares and capital gains is less than wages tax. I agree they shouldn't be taxed twice, but the way we are taxed is not straight-forward.
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Affordability can still matter for rich people. Isolated rich areas end up being very artificial, which is maybe not the environment they want to live in. Or maybe they're raising families. They might want to be somewhere their children can afford once they become adults without having to rely on their parents.
> They might want to be somewhere their children can afford once they become adults
This one was a major factor for me when I escaped from California. I could afford to live there, but my kids would have a hard time following my life path for a number of reasons. I moved to a state where the family as a whole could have a future.
This didn't chase me and my wife from California, but it did chase us from the Bay Area for certain. I entered the workforce as a SWE at an incredibly lucky time.
If you genuinely think that California or New York are anywhere even approaching "communism" then I have to question where you got that information, and for that matter your definition of "communism".
"Communism is when you do something I don't like."
So basically the same as "woke".
Truman quote never gets old...
"Socialism is a scare word they have hurled at every advance the people have made in the last 20 years."
Communism being inter-changable as the vast majority of the time the people using them pejoratively couldn't define either one correctly.
Edit: the people who can't define communism or socialism must be angry with me.
Let's rebrand universal healthcare, livable wages, keeping unrestrained corporatacracyin check, etc as patriotism.
Good. Who cares? Billionaires in California created <3% of the jobs and now that they're gone, that's a niche small business owners can fill right back up. Hooray!
The sooner we treat billionaires as cost centers the better.
Clearly before we were against single engineer unicorns we were for them. Then the billionaires fled in terror...
TLDR: F*** billionaires
Edit: single commas think they're gonna be three commas by enabling them. Tee hee. They'll see. Oh wait, it's 2026, they'll never learn, the Singularity will happen first.
This sounds like first order thinking.
Billionaire bootlickers: because those billionaire boots weren't just going to lick themselves.
Learn what communism is before talking about it.