where the wealth lives
Big-spending Texas cashes in as No. 2 state for wealthy new residents
Not only has Texas' population exploded with new residents in recent years, but it's been a hot spot for high-income households on the move. A new report says Texas has added more wealthy new residents than any other state but Florida.
According to SmartAsset's 2023 study "Where High Earners Are Moving," 22,751 households who moved into Texas between 2020 and 2021 filed tax returns with a minimum adjusted gross income of $200,000 (the figure defined as "high earner" in the report). In that same time frame, 13,743 high-earning taxpayers moved out of state.
This resulted in Texas seeing the second-highest influx of wealthy newcomers in the U.S., totaling 9,008.
It's worth noting that 2020-2021 were the years most impacted by the pandemic and its economic, health, and lifestyle after-effects.
"Despite cost of living challenges, the number of high-earning American households continues to grow," the report's author said. "In 2021, 8.68 million tax returns indicated annual earnings exceeding $200,000 – up from 8.57 million returns just a year earlier. The migration of these high-earning households can have significant effects on a state’s tax base and finances."
Texas hung on to its No. 2 rank for the second consecutive year from SmartAsset's 2022 report, which accounted for the tax year between 2019 and 2020. At the time, the state had an inflow of more than 18,400 high-earning households, and an outflow of over 13,000.
Florida was the only state to outrank Texas for two years in a row with the highest migration of wealthy new taxpayers. Florida's 2023 net migration amounted to 27,567 households that earn over $200,000 a year.
Meanwhile, California and New York lost the most high-earning households in 2021.
"While these states had the largest net outflows of high earners in 2021, they still maintain some of the nation’s highest percentages of high-earning households," the report said. "In fact, at least 7.2 percent of the tax base in each of these states earn $200,000 or more per year."
With its lower housing, rent, and living costs - and no state income tax — Texas continues to attract new residents from out of state. All indications are that the population of Texas, and Dallas-Fort Worth, will continue to swell.
The top 10 states with the highest net migration of high-earning households are:
- No. 1 – Florida (27,567)
- No. 2 – Texas (9,008)
- No. 3 – North Carolina (5,446)
- No. 4 – Arizona (4,563)
- No. 5 – South Carolina (4,510)
- No. 6 – Tennessee (3,917)
- No. 7 – Nevada (2,785)
- No. 8 – Idaho (2,315)
- No. 9 – Colorado (2,052)
- No. 10 – Utah (1,752)
The full report can be found on smartasset.com.