IRS Migration Data & State Policy
The Self-Defeating Policy
States that decouple from QSBS lose the people and the revenue. Migration data doesn't lie. The states losing the most tax filers are overwhelmingly high-tax states that don't conform to federal QSBS.
State QSBS Conformity
34
Conform
5
Decoupled
2
Pending
2
Partial
8
No income tax
The Migration Problem
Top 5 States Gaining Filers
Net interstate tax filer migration, IRS SOI 2021-2022
Top 5 States Losing Filers
Net interstate tax filer migration, IRS SOI 2021-2022
$102 billion
in AGI lost by California to outbound migration, 2020-2022
In 2022 alone, 24,670 high-earner households left, taking $16.1 billion in AGI.
Migration is driven by multiple factors (housing costs, remote work, overall tax burden) and QSBS conformity is one factor among many. But the pattern is clear: capital flows toward lower-tax, QSBS-conforming states.
Sources: CA Legislative Analyst's Office (2024), Center for Jobs (2024)
Migration data: IRS SOI Migration Data 2021-2022, Tax Foundation analysis Dec 2024