Tax and run: How NY and California are bleeding people and prosperity

The numbers don’t lie. The IRS’s latest migration data shows that between 2022 and 2023, New York and California posted a combined net loss of 373,309 people, taking with them $23.5 billion in adjusted gross income that both states no longer collect taxes on, verified directly from the IRS raw migration files. That’s not people on vacation. That’s the tax base, permanently reassigned. The CEO of the Partnership for New York City said it plainly: "The crowd that keeps daring businesses to leave should treat this as a flashing warning sign. When jobs go, revenue goes as well and the affordability problem gets worse." That’s cause and effect.

Wealth taxes sound great until reality hits. Taxes aimed at the ultra-wealthy always land on the backs of the middle class. Job creators leave. The ones that stay raise prices or cut jobs. Services shrink. Costs rise. That’s not a path to affordability. It’s a roadblock to it.

California is the case study. The state recorded a net loss of 216,000 residents in 2025 alone, and Los Angeles County led the nation in population decline, shedding 54,000 residents in a single year. Two policies are accelerating the exit. First, a retroactive wealth tax is heading to the ballot, backed by 52 percent of voters. The wealthy are already gone. That eroded tax base lands on the middle class. Second, a push for a $30-per-hour minimum wage in Los Angeles and beyond. Mandatory wage floors increase unemployment, reduce labor demand and push prices higher. People aren’t leaving California because they want to. They can’t afford to stay.

BLUE STATES ARE CHANGING THE TAX RULES ON THE WEALTHY AND IT'S GOING TO COST ALL OF US

New York isn’t far behind. JPMorgan Chase CEO Jamie Dimon warned this week that politicians who think excessive taxation is "moral" are hurting the cities they claim to help, and that Americans "vote with their feet." He’s right. Mayor Mamdani is threatening a 9.5 percent property tax hike on middle-class New Yorkers, hitting over three million residential units, most occupied by households earning around $122,000 a year, while eyeing the city’s rainy day reserves to plug the gap. Taking more from people who are already stretched doesn’t close the affordability gap. It widens it.

So where are people going? Florida, Texas, Tennessee, Nevada, all states with no income tax. The capital is following. Bloomberg reported that between 2020 and early 2023, more than 370 investment firms managing $2.7 trillion in assets relocated their headquarters out of high-tax states and into the Sun Belt. New York and California each lost roughly $1 trillion in managed assets. Money flows in the direction of least resistance. It always has.

For those who stay, the experiments don’t improve. In Cook County, Illinois, a guaranteed basic income pilot provides $500 in unconditional monthly payments to over 3,200 families. Advocates are pushing to expand it to 100,000 Illinois residents statewide, and a coalition of 150 city officials called "Mayors for Guaranteed Basic Income" is driving the same push nationwide. No strings attached for recipients, but a giant one attached to taxpayers.

The third leg of the progressive affordability stool is price controls. Politicians have accused grocers of gouging, even as the Food Industry Association puts average grocery net margins at 1.7 percent. That’s not gouging. That’s survival. These same voices want healthcare costs capped, ignoring that a government insurance mandate broke that market. Rent freezes are already on the table in New York City. The logic never changes: declare a crisis, blame the private sector, impose controls. What follows is just as predictable: supply falls, investment stops, shortages deepen and the calls for more intervention grow louder. Price controls don’t solve the affordability problem. They cement it.

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The trajectory is clear. A 2026 survey found 38 percent of Americans have already moved because their city became too expensive, doubling among Gen Z. Twice as many as the year before say they’d go wherever the cost of living is low. If California passes its wealth tax, if New York locks in its property hike, if price controls spread from rent to groceries to healthcare, the people who can leave will. The ones who can’t get left with a shrinking tax base and an expanding government. The only question is whether the politicians engineering this exodus will ever be held accountable for it.

This isn’t theoretical. It’s playing out in real time, in real cities, to real families. The people leaving aren’t making a political statement. They’re making an economic calculation and the math isn’t close. The progressive playbook of tax more, spend more, and control prices has never produced affordability. It has produced exactly what we’re watching: an exodus. The IRS data is the verdict. The migration is the punishment. Soaring populist rhetoric makes for a great sound bite. It makes life more expensive for everyone else though. That’s why people are voting with their feet.