💲 IRS released data showing trends from tax year 2020

💲 NJ ranks among the worst states in a new report on outmigration dollars

💲 It may be easier to leave New Jersey than in years past

It's been long known as the worst in the nation for property taxes. Its residents are said to pay the most in taxes over a lifetime compared to folks in any other state.

So you may not be surprised to learn that New Jersey performs quite badly in a tax migration analysis released on Wednesday by the National Taxpayers Union Foundation.

Looking at IRS data from tax years 2019 and 2020, NTUF determined that the Garden State lost more than $3 billion in taxable income from one year to the next, thanks to folks leaving New Jersey to live somewhere else.

"That's counting people coming in as well," said Andrew Wilford, interstate commerce initiative director for the research group. "That's a really substantial amount of revenue that's no longer available to New Jersey tax officials."

Due to high tax burdens, the report says, New Jersey lost close to 26,000 residents and $3.8 billion in net adjusted gross income, or $409 per taxpayer.

Income dollars-per-taxpayer gained/lost in tax year 2020 (National Taxpayers Union Foundation)
Income dollars-per-taxpayer gained/lost in tax year 2020 (National Taxpayers Union Foundation)

Overall, the analysis shows a steady pattern of individuals fleeing high-tax states in favor of lower-tax states.

For example, New Jersey ranked fifth worst in both the NTUF survey for AGI lost, and in the Tax Foundation's rankings of states based on their tax burdens. In 2020, Florida's tax burden was considered fifth-best in the country, and the state gained more than $39 billion in income.

According to Wilford, taxes are one of many factors one looks at when deciding where to move or whether to stay put.

But changes brought about by the coronavirus pandemic, he said, could allow more cash-strapped New Jerseyans to walk — fewer residents are forced to live as close to their place of employment due to shifts to remote or hybrid work.

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