Americans save $2,800 when moving from California to no-tax state, but there’s more to the calculation

Americans continue to chase affordability by moving to states with lower cost of living, and once again no-income tax states topped the chart for most in-bound migrations in 2023.

The two largest US states without income taxes — Texas and Florida — grew by the most residents last year. Texas added 473,453 residents, and 365,205 people became Floridians between July 1, 2022 and July 1, 2023, according to the US Census Bureau. Meanwhile, two states with some of the highest state income tax rates in the country lost the most residents. New York lost 101,984 residents and California lost 75,423 in 2023, suggesting state taxes play a large part in Americans’ moving decisions.

To be sure, a move from a high-tax state saves a chunk in income taxes. A California household earning the median income of $91,905 would save nearly $2,843 a year by moving from California to a no-income-tax state. But there’s more to the calculation, experts say, including property taxes, real estate prices — not to mention less-tangible quality of life measures.

In other words, it’s a value proposition, not a simple equation.

“When people compare shops, they don’t always buy the cheapest thing … they go for value. And what you value may be different from person to person,” Jared Walczak, vice president of state projects at the Tax Foundation, told Yahoo Finance.

Full coverage: Taxes 2024 — Everything you need to file your taxes on time

Property tax should be considered

Residents of every state have to pay taxes one way or another even in no-income-tax states. The governments need to fund public welfare, education, infrastructure, and other services somehow. In general, residents pay through a combination of property taxes, income taxes, and sales taxes.

“You need money to build a road to drive on,” Edvin Givargis, a state and local tax partner at Andersen, a global tax service firm, explained to Yahoo Finance. “So if your state has a road, the governors didn’t pay for it out of…