Massachusetts risks losing $1B as wealthy flee for lower-tax states
Migration out of Massachusetts rising at an 'alarming' pace
Why Americans are moving from blue states to red states
Former Council of Economic Advisers chairman Kevin Hassett discusses a CNBC report that lists several red states as the 'worst' places to live and work on ‘The Bottom Line.’
Massachusetts is in danger of losing nearly $1 billion in annual revenue over the coming years as high state taxes trigger an exodus of wealthy residents.
Since 2013, migration out of Massachusetts has seen an "alarming" 1,100% increase to more than 39,000 people, according to new findings published by Boston University's Questrom School of Business. If the trend continues, more than 96,000 residents making a cumulative $19.2 billion in adjusted gross income will leave the state by 2030.
The study estimates those departures would cost Massachusetts about $961 million in income tax revenue each year.
The Bay State has already lost $821 million in income tax revenue since 2011.
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A view of the Boston skyline. (Ron Dahlquist/Design Pics Editorial/Universal Images Group via Getty Images / Getty Images)
Residents cited a number of reasons for relocating, including a high tax burden and expensive housing and health care costs. Widespread remote work policies have also made it easier for residents to pack up and leave, contributing to the growing exodus of prime-age workers.
"Move-to states ranked significantly better in three drivers; lower income taxes, cost of housing and cost of healthcare," the study said.
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Florida and New Hampshire were among the top destinations for residents fleeing the state. Florida does not have an income tax, while New Hampshire has a flat rate of 4% that it levies only on interest and dividend income. Other popular destinations include Maine, North Carolina and Texas.
About half of the residents who left Massachusetts remained in New England.
About half of the residents who left Massachusetts remained in New England. (John Lamparski/Getty Images / Getty Images)
"Migration patterns are driven by citizens voting with their feet, a report card on how well a state is doing to meet their needs," the report said. "Each year, millions of Americans move from one state to another. Movement can happen for numerous economic and non-economic reasons. Growing costs in a state can make it unattractive to individuals, families and businesses."
Census data suggests that Massachusetts is part of a broader trend, in which residents are moving from higher-tax states to states with lower taxes.
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In 2023, New York, California, Hawaii, Alaska and Illinois lost the most residents as a share of their population, while South Carolina, Delaware, North Carolina, Tennessee and Florida saw the greatest population increase, according to a Tax Foundation analysis of Census data.
"This population shift paints a clear picture: Americans are leaving high-tax, high-cost-of-living states in favor of lower-tax, lower-cost alternatives," the Tax Foundation, a group that advocates for lower taxes, said in a blog post.