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From Texas to Florida: More Americans Are Decamping to Less-Expensive States —With Lower Taxes

People are decamping from California, New York and Illinois for states where the cost of living is lower.

An aerial view of a Florida beach Unsplash

If you’re not a fan of high taxes, you’re not alone.

Last year, almost 1.2 million Americans moved to a new state, and most of them relocated to one considered to have low taxes, according to US Census Bureau and Tax Foundation data cited by Illinois Policy. The states that saw the largest loss of residents included California, New York and Illinois, while those that saw the largest influx of people included Florida and Texas.

Overall, the top five that attracted new residents drew in 68 percent of people switching states, and they each had a total effective tax rate of 9.9 percent or lower. Meanwhile, the bottom five lost 76 percent of all people moving to new states and had total effective tax rates of 11.5 percent or higher.

This trend has been occurring for years, Bloomberg noted, as those in higher-tax states have sought out larger houses, warmer weather and lower costs in the Sun Belt states that stretch across the South. This dynamic was even more pronounced during the pandemic, and it doesn’t seem like it will stop anytime soon.

By the numbers, California saw the greatest decrease in net migration, with a total loss of 343,230 residents, according to a report from the National Association of Realtors that Bloomberg cited. New York came next, with a decrease of 299,557 residents, and Illinois followed, with a drop of 141,656 residents. On the opposite side, Florida saw a net increase of 318,855 residents, while Texas experienced the same to the tune of 230,961 people. North Carolina came in a distant third, with 99,796 new residents.

The increase in remote work has certainly made some of this relocation possible, with employees who used to be based in large city centers having the flexibility to now do their job from anywhere. Many left urban areas toward the beginning of the pandemic, and have decided to stay away as costs of living, from rent to groceries, have risen.

“While affordability hit record lows in 2022, it is the primary reason that people continue to relocate from these big city centers to less dense and more affordable areas,” wrote Nadia Evangelou, an economist for the National Association of Realtors.

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