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The 10 Most Popular States for High-Earners in the US
Florida
Between 2020 and 2021, Florida saw the largest net migration of high-earning residents, with over 40,000 households earning $200,000 or more moving to the Sunshine State. Florida lost 12,567 high-earning households during the same period, bringing its net migration to 27,567 households.
Texas
Texas had the second highest net migration of high earners, with 22,751 households moving in and 13,743 moving out, resulting in a net migration of 9,008 households. The absence of state income tax in Texas could be a contributing factor to its popularity among high-earning individuals.
Tennessee
Tennessee attracted 11,437 high-earning households, while 5,991 households moved out, resulting in a net migration of 5,446 households. Like Texas, Tennessee does not collect state income tax, making it an appealing choice for high earners.
North Carolina
North Carolina saw 9,763 high-earning households move in and 5,200 move out, resulting in a net migration of 4,563 households. The state's affordable cost of living and strong job market may be factors contributing to its appeal among high earners.
South Carolina
South Carolina attracted 7,312 high-earning households, while 2,802 households moved out, resulting in a net migration of 4,510 households. The state's warm climate, low cost of living, and attractive coastal areas make it an appealing choice for high earners.
Arizona
Arizona saw 7,353 high-earning households move in and 3,436 move out, resulting in a net migration of 3,917 households. The state's year-round sunshine, outdoor recreational opportunities, and affordable housing may be factors contributing to its popularity among high earners.
Georgia
Georgia attracted 5,576 high-earning households, while 2,791 households moved out, resulting in a net migration of 2,785 households. The state's thriving economy, diverse job opportunities, and mild climate make it an attractive choice for high earners.
Colorado
Colorado saw 3,246 high-earning households move in and 931 move out, resulting in a net migration of 2,315 households. The state's natural beauty, outdoor recreational activities, and strong job market may be factors contributing to its appeal among high earners.
Nevada
Nevada attracted 8,771 high-earning households, while 6,719 households moved out, resulting in a net migration of 2,052 households. The absence of state income tax in Nevada, along with its entertainment options and favorable climate, make it an attractive choice for high earners.
North Dakota
North Dakota saw 3,579 high-earning households move in and 1,827 move out, resulting in a net migration of 1,752 households. The state's booming oil industry, strong job market, and affordable cost of living may be factors contributing to its appeal among high earners.
High-earning Americans often seek states that offer the lowest tax burdens, which is one reason why states like Florida and Texas lead the rankings. However, it's worth noting that if the ranking looked at inflows alone, California and New York would rank third and fourth, respectively. Despite being historically more affordable than other parts of the country, states in the Sun Belt, which includes those across the southern and southwestern parts of the U.S., have faced rising prices due to increasing inflation. Several cities in Florida, Texas, and Arizona have experienced some of the fastest rising inflation rates.
Conclusion:
The Impact on New Businesses
The popularity of certain states among high-earning individuals can have a significant impact on new businesses. Understanding the trends and preferences of high earners can help identify potential opportunities and challenges for entrepreneurs looking to start a business in these states.
States like Florida and Texas, which have the highest net migration of high earners, attract individuals who are likely to have disposable income and a greater capacity for spending. This creates a favorable environment for businesses targeting affluent customers, such as luxury brands, high-end restaurants, and upscale services.
Additionally, the absence of state income tax in Texas, Florida, and Tennessee makes these states more appealing to high earners. This can free up more funds for investment and discretionary spending, further benefiting local businesses.
However, with the influx of high earners, these states may also face increased competition. New businesses will need to stand out from the crowd and offer unique value propositions to capture the attention and loyalty of affluent consumers.
Furthermore, the rising inflation rates in certain Sun Belt states, including Florida, Texas, and Arizona, may pose challenges for new businesses. Higher costs of living and increasing prices can impact consumer spending habits and the profitability of businesses. Entrepreneurs should carefully consider pricing strategies and market dynamics while planning their ventures.
In conclusion, entrepreneurs should carefully analyze the demographic and economic trends in states popular among high earners. While opportunities exist, they must be mindful of competition and the potential challenges posed by factors like inflation. A thorough understanding of the target market and adaptability to changing conditions will be key to success in these highly sought-after locations.
Article First Published at: https://www.cnbc.com/2023/07/29/households-earning-200000-dollars-or-more-are-flocking-to-the-south.html.svg)
