Taxes, Revenues, and Net Migration in California

53 Pages Posted: 28 Mar 2022 Last revised: 27 Dec 2022

See all articles by Joshua D. Rauh

Joshua D. Rauh

Stanford Graduate School of Business; Hoover Institution; National Bureau of Economic Research (NBER)

Date Written: December 21, 2022


This paper explores the migration patterns of California taxpayers and analyzes the potential economic and revenue implications of this movement using the universe of California individual income tax filings from 2000 to 2020. Departure rates have outweighed in-migration rates for most tax brackets over the time period. California's top earners are particularly mobile, showing the highest rates of departure around tax policy changes such as Proposition 30 in 2012 and the Tax Cut and Jobs Act (TCJA) of 2017 as well as the COVID-19 pandemic in 2020. Consequently, potential net outflows of taxable income spiked to nearly $4 billion in the year TCJA was implemented and $10.7 billion around COVID-19. High-earning movers have been consistently more likely to leave California for zero-income tax states since 2012, and those who experienced larger tax increases under TCJA were more likely to depart. During the COVID-19 episode in 2020, changing patterns of destination states provide evidence that taxpayers were motivated by COVID restrictions as well. For families with dependents, the share of California taxpayers who left and moved to a given state was higher in 2020 by an average of half a percentage point for every 10 percent fewer days of school closures in the destination state. Migration, particularly of high income individuals, has substantial economic and revenue implications for California.

Keywords: income taxation, migration, high earners, state taxation, marginal tax rates, state and local fiscal policy

JEL Classification: H24, H31, H71, H73, J22, J61, R23

Suggested Citation

Rauh, Joshua D., Taxes, Revenues, and Net Migration in California (December 21, 2022). Available at SSRN: or

Joshua D. Rauh (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Hoover Institution ( email )

Stanford, CA 94305-6010
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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