where the money goes

Even the eternal sunshine and coastal views don’t seem to be enough to keep people from fleeing California.

The Golden State lost $91.4 billion in revenue between 2019 and 2023 as people fled the state, representing the largest deficit in the country, according to IRS data.

In 2022-2023 alone it saw an outflow of 11.9 billion – again, the largest loss of any state in that year, according to the latest figures released last week.

The report highlights a troubling trend on the West Coast that economists warn is a “major concern,” and could worsen as the state scales future wealth taxes for billionaires.

Early Californians mostly headed for Texas, Nevada and Arizona – with some making the long journey to New York and others fleeing to Washington state.

Jake Krimmel, Senior Economist at Realtor.com told the California Post that anytime large numbers of people leave the country it can mean financial damage to local government.

“It’s not just the number of people who travel, but the wealth or income profile of the people who travel,” Krimmel said.

“California is a state with a lot of money, so any time someone from California leaves, especially for health reasons to buy a bigger house or live in a less expensive place, that’s going to be more money when you leave the states. That’s part of what comes from California’s numbers.”

Krimmel told The Post the reason people are leaving is twofold — high taxes and low housing supply.

“California has been chasing housing issues for decades and it was born out of a housing shortage,” Krimmel said, adding that people are realizing that you can get more housing for less money in places like Texas or Florida.

Alexander Efros, a certified financial planner and tax expert said California’s poor tax policies are also to blame for driving people out of town.

“On the corporate income tax side, the top marginal rate in Florida is 5.5% compared to 8.84% in California,” Efros said.

“On the individual side, the biggest difference is – Florida has no personal income tax, and California has that much higher rate of 13.3%.

California is ranked 48th on the Tax Foundation’s 2026 State Tax Competitiveness Index, and the impact, Efros said, is starting to show as more customers choose to leave the state because of how much they can save in other parts of the country.

“Now the trend is that many people are leaving California,” Efros told The Post. “Now we hear their groans when they get their tax bill and realize they’re not paying six or five figures, just for the right to live in California.”

California also has no preferred capital gains rate, meaning that no matter how long you’ve held the stock, it’s all based on the marginal tax rate.

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“If they’re a California resident and they dispose of a million dollar stock, they’re going to pay $133,000 in federal income tax,” said Efros, who was talking about a client considering leaving for this reason.

“If that same person moves to Florida and it’s a smart move, they’ll save 133,000 if they continue to sell that stock.”

Efros added that as the stock market soars, many Californians are sitting on billions in unrealized gains.

So where do people go?

The top destination for people leaving the Golden State was Texas, according to the report.

Between 2019 and 2023, approximately $28 billion in total income moved from California to Texas, representing approximately 230,000 tax filers.

Jenny Wallace, a real estate agent in Texas, said her state saw a surge of people buying homes between 2022 and 2023, a trend that continues today.

“The prospects calling me were important. There were times when I was hanging up 10 times a month,” Wallace told The Post.

“Now there is another wave of people coming to see how others have benefited from it.”

While experts told The Post they believe the trend will continue, Krimmel said a push from long-term layoff companies may offer a silver lining.

“It used to be that people could keep their high-paying job at a California company and live in Arizona or Texas and work remotely.

“But, if they’re brought back into office, maybe we’ll see less of that,” Krimmel said, adding that it will depend on whether states and cities can make it a desirable place to live.