For decades, the largest fortunes in the United States have been located near major financial or innovation centers. These are highly localized regions like New York or Los Angeles that thrive in the heat of the financial sphere of Wall Street or Silicon Valley. However, this trend is changing.
The great fortunes of the United States are packing their bags, causing a capital flight that is spreading across the map to states like Texas, Florida or Arizona with tax rates more favorable to great fortunes.
You to Texas, I to Florida. Elon Musk’s recent moves, SpaceX and Neuralink’s change of tax headquarters from Delaware to Texas, or Jeff Bezos’s move from Seattle to Miami are clear examples of this trend in the distribution of wealth.
The US Wealth Report 2024, prepared by immigration and investment consultancy Henley & Partners, reflects these capital movements by collecting the history of migrations of millionaires (and their assets) over the past decade.
122,000 luxury moves in ten years. In 2013, 51,000 millionaires moved their capital to other states or cities away from major centers of economic concentration, according to data from Henley & Partners.
Mehdi Kadiri emphasizes that in 2022 the record is already 84,000 millionaires, that is, millionaires who are packing their bags, and that the flight of wealth is expected to increase to 122,000 millionaires in 2024 due to the increase in taxes, crime rates and political decisions: North America director of Henley & Partners in the conclusion of his report.
High taxes and stressed housing areas. Going back to the example of Jeff Bezos changing his residence to Miami, it turns out that with this change, the millionaire will save approximately $ 300 million in taxes only in the first quarter of the year. Luck.
The Tax Foundation organization, which is responsible for monitoring tax rates globally, also points in the same direction. “Of the 18 states and Washington, D.C., with per capita tax burdens at or above the national average, 14 experienced net outmigration,” the January 2024 report states.
High developable land prices in the two major economic centers on the east and west coasts of the United States mean that investment options in these cities are not as attractive as in other, more distant cities that are increasingly attractive.
Demographic change among states in 2023. Source: Tax Foundation
Millionaires stay in the US but move. The United States remains the country with the highest number of millionaires residing on its territory, representing 32% of the world’s wealth. These fortunes, previously concentrated mainly in New York or California, have now moved to places where real estate prices are cheaper, allowing them to acquire larger properties with less investment.
Tax Foundation data shows that the largest migration occurred in New York state, with a demographic loss of 1.1 percent, followed by California with a loss of 0.9 percent and Hawaii with a loss of 0.8 percent. On the other side of the coin, there are states such as South Carolina with an increase of 1.6 percent, Delaware with an increase of 1 percent, and Tennessee and Florida with an increase of 0.9 percent.
If we compare this data with the tax rate obtained from per capita tax collection data, we see that New York ranks first and California ranks third. On the other hand, the countries that host this migration are at the bottom of the table.
Greenwich, Austin or Palm Beach. To give a more concrete example of where millionaires are moving, many of those with financial interests in New York chose to move about 30 miles north of the Big Apple. They would only have to travel that distance to cross into the state of Connecticut, moving to Greenwich (population about 64,000) or to Darien (22,000), which has increased its millionaire population by 84% in the last decade.
The same thing happened with those who moved to Austin following Elon Musk’s companies. The city’s millionaire population has increased by 110% in the last decade.
Palm Beach is another favorite destination for millionaires. It’s no coincidence that former President Donald Trump resides in Mar-a-Lago, as the area has become a golden destination for retired millionaires and corporations, increasing its millionaire population by 93%.
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Ashley Johnson is a science writer for “Div Bracket”. With a background in the natural sciences and a passion for exploring the mysteries of the universe, she provides in-depth coverage of the latest scientific developments.