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Americans, along with billions in taxable income, are flocking to Southern and Sun Belt states, accelerating a population and wealth shift away from several coastal blue-state strongholds, according to new IRS migration data.
The shifts are reshaping where economic and political power is concentrated ahead of the 2026 midterms, affecting housing markets, state economies, congressional representation and the balance of power.
Texas and Florida led the nation in inbound migration between 2022 and 2023, gaining more than 56,000 residents and 55,000 income tax filers, respectively, according to the IRS. Florida also gained roughly $20.6 billion in taxable income, while Texas added another $5.5 billion.
North Carolina, South Carolina, Tennessee and Arizona also ranked among the top destinations for interstate movers, underscoring the broader population boom across the South and Sun Belt.
Adjusted for population size, South Carolina posted the nation’s largest gain from domestic migration at 1.12%, fueled by more than 29,000 incoming households carrying roughly $4.1 billion in taxable income.
Meanwhile, California recorded the nation’s largest outbound losses, with more than 100,000 income tax filers and nearly $12 billion in taxable income leaving the state between 2022 and 2023.
New York followed, losing roughly 72,000 households and nearly $10 billion in taxable income, while Illinois and New Jersey shed about $6 billion and $2.6 billion, respectively.
Experts say the migration boom reflects broader affordability pressures pushing households toward lower-cost, lower-tax states across the South.
"While tax friendliness is not the sole determinant of where one chooses to live or start a business, states experiencing net in-migration tend to have more competitive tax structures and lower overall costs of living," Nicole Fox, a policy analyst at the Tax Foundation, told Fox News Digital.
The migration trends are also reshaping state economies, labor markets and housing demand as fast-growing Sun Belt states absorb new residents, businesses and taxable income, while states with sustained outbound migration face shrinking tax bases and slower population growth.
