A recent Budget & Policy Center (BPC) article by Emily Vyhnanek (August 13, 2026) argues that “millionaire tax flight”, caused by the capital gains and income tax legislation is a false narrative. The article claims that high earners stay for family, schools, and jobs, that Washington’s capital gains tax and similar taxes elsewhere prove revenues hold up without mass exodus. The opinion piece states that federal tax cuts offset the new 9.9% “Income Tax”, that the post-tax burden on the top 1% remains relatively low and that the tax’s investments will attract people via jobs and growth.
Washington Policy Center (WPC) has, using IRS migration data, SmartAsset studies of that data, and other sources to challenge the core “no meaningful flight” claim. The data shows a pattern of higher-income outflows even as overall population or filer counts can look neutral or positive, precisely the selective exodus that matters for the tax base and economic activity.
Here is a point-by-point examination using data to support the arguments.
BPC Claim - “Wealthy households don’t move for taxes; they stay for community, family, schools, and jobs”
WPC agrees that not everyone moves solely for taxes and that overall filer counts can show net gains. However, IRS migration data (the standard source for tracking interstate moves via tax returns) consistently show net losses of adjusted gross income (AGI) because the people leaving have higher average incomes than those arriving.
Washington has seen net gains in the number of returns/filers in some periods, but net losses in total AGI. This indicates an outflow of higher-earning households (including those over $200,000), business owners, and high-income individuals.
Additionally, the true impact of the enacted progressive income and capital gains tax is not known yet as the latest IRS data was issued prior to both taxes being signed into law. Individuals and businesses take time to react and while the preliminary data is grim, indications are migration may get much worse as later years of IRS data become available.
A 2024 SmartAsset analysis of IRS data found Washington lost a net 222 high-earning millennial households (incomes over $200,000) between 2021 and 2022, the eighth-highest such loss nationwide. Follow-up reporting showed accelerating outflows among affluent younger professionals.
Common destinations include lower-tax states such as Idaho, Texas, Nevada, and Florida. Inflows often come from higher-tax states like California, which can mask the income-quality problem.
High-profile, tax-sensitive moves reinforce the pattern. Jeff Bezos relocated to Florida in 2023 (shortly after the capital gains tax took effect), avoiding hundreds of millions in potential Washington tax. Fisher Investments moved its headquarters from Washington to Texas the same day the state Supreme Court upheld the capital gains tax and other executives and founders have cited the tax climate as a reason to move.
Most recently former Amazon executive Dave Clark and his wife Leigh Anne Clark moved their startup AI business, that has raised $150 million in funding to Dallas from Seattle.
Cristobal Young’s research (cited by BPC) shows most millionaires are relatively immobile in aggregate, but it does not erase the measured net AGI and high-earner household outflows documented in IRS data for Washington, nor the fact that when high earners do move, tax differentials are a documented factor in destination choice.
BPC Claim - “Evidence from Washington’s capital gains tax shows the wealthy stay and revenues hold up”
BPC highlights strong capital gains collections (including the recent >$1.5 billion figure) as proof against flight. When you dig into the data however, it shows the opposite. As individuals sell companies to move they may have to pay the capital gains tax and certainly will pay the income tax on the taxable gain over $1 million. A spike in the capital gains tax can indicate a longer-term cost in lost economic activity, future tax base, jobs, and philanthropy, and that selective high-earner flight is already visible in the migration data coinciding with the tax’s implementation.
High current collections do not prove the tax has no long-run behavioral effects.
IRS data for periods overlapping the capital gains tax rollout (e.g., 2021–2022 and 2022–2023) show net AGI losses (examples cited by WPC include figures on the order of hundreds of millions to over $1 billion in specific windows).
National Taxpayers Union Foundation analysis of the flows ranked Washington poorly for net taxpayer losses (one taxpayer leaving on net roughly every 30 minutes in the examined period).
A 2025 Texas A&M study of the IRS data identified Washington having positive household migration but negative AGI migration.
BPC Claim - Federal offsets, “still low” effective rates, and projected economic benefits will keep people here
These points address relative attractiveness after the tax and the hoped-for growth effects. WPCs analyses show that high earners and business owners are already mobile and responsive to the cumulative tax and regulatory climate (capital gains tax + the new 9.9% tax on income over $1 million + other increases). Net AGI losses and high-earner household outflows predate the full Income Tax and accelerated around the capital gains tax.
WPCs work, grounded in IRS migration statistics and secondary analyses of those data (SmartAsset, NTUF), shows a consistent pattern, Washington can gain filers overall while losing higher-AGI households and total taxable income. That selective outflow is the economically relevant form of flight for a tax aimed at the top end of the distribution. High capital gains collections in some years do not erase the measured net AGI and high-earner household losses that occurred as the tax was implemented, nor the high-profile residency and headquarters shift to lower-tax states.
Migration is multi-causal (housing costs, weather, remote work, family, etc.). The IRS and related data do not prove taxes are the only driver, but they directly contradict the claim that meaningful high-earner outflows are not occurring or are not visible in the numbers.
