Exodus fears

Despite exodus fears, the number of California millionaires has grown, new data shows

By Tessa McLean

A so-called “California exodus” has been declared numerous times since the start of the COVID-19 pandemic, with well-known companies like Oracle and Tesla (and its high-profile owner Elon Musk) joining the relocation frenzy. The claims of a large-scale exodus were more or less unfounded, with the real story centered around in-state migration, mostly from residents fleeing coastal cities to move inland. Even with certain outspoken millionaires decamping for other states, California saw its millionaire residents grow by 66% between 2019 and 2021, Bloomberg reported. 

The share of U.S. taxpayers with an income of $1 million or higher rose from 17.1% to 17.9% in California between 2019 and 2021, according to recently released data from the Internal Revenue Service. That equates to more millionaires than any other state, with other high population states like Florida and Texas losing more millionaires than they gained in the same time period. The losses were small — just 0.1% and 0.3%, respectively — but those states have lower taxes than California and are typically perceived to benefit the rich.

New York has the second-highest number of millionaires in the country, with 8.7% of people who filed their taxes in 2020 having a gross income of $1 million or more. Texas and Florida took the third and fourth spots, respectively.

Much of California’s millionaire growth between 2019 and 2021 likely came from a booming tech sector that has since slowed down considerably and has been riddled with rampant layoffs. Still, many are betting on an AI boom in the Bay Area that could lead to plenty of new millionaires.