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Florida

No state attracted more high-earning households than the Sunshine State.

According to SmartAsset, Florida added 32,019 tax filers who reported at least $200,000 in income in 2020. While the state also lost 11,756 such filers during the year, the end result was a net gain of 20,263 high-income filers.

One of the ultra-high earners who moved to Florida was billionaire activist investor Carl Icahn. The 86-year-old was born in New York City and had run his business from the city for decades. He relocated his office to Sunny Isles Beach, Florida in 2020.

An obvious advantage of moving to Florida — especially for those who live in the Snowbelt — is the weather. But the main reason why Florida is the top destination for high earners could be financial: it’s one of the few states in the country that doesn’t charge its residents state income taxes.

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Texas

Texas is another warm state that does not have a state income tax. So it’s no surprise that high-income households are flocking to it.

In 2020, 18,417 tax filers who made at least $200,000 moved to Texas, while 13,061 high-earning filers left it. Simple math shows a net gain of 5,356 high-income households for the Lone Star State.

Other than the absence of a state income tax, Texas also attracts newcomers with its reasonable cost of living. The typical home value in Texas is $315,831 according to real estate marketplace Zillow, which is lower than the national average of $357,589. New York City, on the other hand, has a typical home value of $782,640.

At the same time, Texas boasts a booming economy and plenty of job opportunities. According to the Bureau of Labor Statistics, Texas rans fourth (among U.S. states) for net job growth as of August 2023.

More: First-time homebuyer programs in Texas

Arizona

With a net gain of 5,268 tax filers with at least $200,000 in income in 2020, Arizona is the third most popular destination for high-earning migrants.

Arizona has a 2.50% individual income tax. With all other taxes combined, Arizona still ranks 15th among all U.S. states for average annual taxes.

One last thing: while Florida is known as the Sunshine State, Arizona actually gets the most sun. It receives an annual average sunlight of 5,755 kJ per square meter — more than any other state in the country.

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Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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