California and New York are losing rich Americans at the highest rate in America — here’s where the money’s moving instead

Recently, California alone saw a net outflow of 24,670 high-earners who had an average adjusted gross income (AGI) of $1.3 million. Meanwhile, in New York, there was a net outflow of 12,040 high-earners, with those movers reporting an average AGI of $1.1 million.

However, the states where these wealthy Americans are moving to have affordable housing and lower taxes, highlighting how the cost of living is a top priority even for the richest Americans.

The SmartAsset study took into account the latest IRS data from the 2021-2022 tax year and used households earning an annual income of more than $200,000 as a threshold.

So, where are these high-income earners headed — and why did they decide to pack their bags?

These two low-tax havens are most in demand

There are five states, in particular, where some wealthy Californians and New Yorkers are starting a new life — and two of them are major low-tax havens.

• Florida: 29,771 net inflow of high-earning households
• Texas: 8,260 net inflow of high-earning households
• North Carolina: 5,792 net inflow of high-earning households
• South Carolina: 5,270 net inflow of high-earning households
• Arizona: 4,365 net inflow of high-earning households

While Florida, specifically, is the clear winner here, it’s no mystery why it (and Texas) topped the list — neither has a state income tax.

This would come as a welcome reprieve for New Yorkers, as they face personal state income tax rates up to 10.9% (not counting federal or local taxes) for high-income earners.

Californians, as well, face hefty state income tax rates — the highest in the country — which can soar to a 12.3% bracket. (For those earning more than $1 million annually, the new highest tax rate is a whopping 14.4%).

In addition, these tax-friendly states are particularly attractive to retirees looking to avoid a sizable cut of their retirement benefits to the taxman.

Both of these states also offer plenty of sunshine and boast high rankings in terms of employment opportunities.