Blue States Area Getting So Desperate They're Considering 'Exit Taxes'

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Things are getting so desperate in some blue states that Democrats are considering the levying of “exit taxes” for those who leave the state.

Apparently they thought of building a wall to keep people from leaving was viewed as too Soviet.

IRS migration data shows that Americans are not just moving, they are moving their income with them, and overwhelmingly in one direction. States that voted for Donald Trump gained a net $37.2 billion in income and roughly 492,000 filers, while states that supported Kamala Harris lost about $40.8 billion and more than 520,000 filers.

At the state level, the pattern becomes even harder to ignore. California alone lost roughly $11.9 billion in adjusted gross income, New York lost about $9.9 billion, and Illinois saw a decline of around $6 billion. Meanwhile, Florida gained more than $20 billion and Texas added billions more, continuing a multi-year shift in both population and capital.

High earners, business owners, and mobile professionals are disproportionately represented among those leaving, meaning the fiscal consequences are magnified. Tax bases shrink in one place and expand in another, and over time, those shifts compound and the only way to keep people from bailing is to threaten them.

The movement is also visible at the corporate level. Starbucks CEO Howard Schultz relocated from Washington state to Florida while overseeing a headquarters move. ExxonMobil left New Jersey for Texas, Uber shifted from California to Texas, and Yamaha Motor departed California for Georgia. JPMorgan Chase CEO Jamie Dimon pointed directly to tax burdens as a factor, stating, “The truth is that while New York City has much going for it, particularly for financial companies (because of extraordinary local talent), it also has the highest city and state corporate taxes and the highest individual income and state taxes.”

Even state officials have begun to acknowledge the problem. New York Gov. Kathy Hochul, addressing the erosion of her state’s tax base, said, “Maybe the first step should be go down to Palm Beach and see who you can bring back home because our tax base has been eroded.”

Yet the policy response in many of these states is not to reverse course, but to double down. California’s proposed Billionaire Tax Act would impose a one-time 5% levy on the total net worth of individuals with more than $1 billion in assets. The move would actually cost the state about $25 million, but it would make progressives feel powerful, at least until they ran out of other people’s money to spend. Washington state has already enacted a 9.9% tax on income above $1 million. Michigan and at least nine other jurisdictions are exploring similar measures.

Some proposals go further still. Policymakers have discussed mechanisms that would apply to individuals who leave shortly after new taxes take effect—an attempt to tax wealth even as it exits the state.

Sandra Swirski, founder and CEO of Integer, described how such a system would function, noting, “You tally up the value of your home, your cars, your furniture, your assets, your stocks, your bonds, your art and there is a tax on that value.” She added that the process is not straightforward, explaining, “The value of these assets, your net worth, in some cases is very easy to calculate, stocks and bonds and alike. In other cases it’s really difficult to calculate.”

The tension at the center of this debate is increasingly difficult to ignore. On one hand, states are losing high-income residents and the revenue they generate. On the other, those same states are considering policies that may further incentivize departure.

Which raises the underlying question: if a state is well run, why would it need to tax people for leaving?

The migration data offers a kind of answer. Americans are making decisions based on the practical consequences of governance—tax burdens, regulatory environments, and the overall cost of doing business. They are, in effect, voting with their feet.

In that context, the idea of taxing exit begins to look less like a solution and more like an admission. Just like Berlin in the 1960s, it reveals that that the model is failing and that instead of fixing the underlying conditions driving people out, policymakers are simply hoping to use force to keep them in.

Will Donald Trump have to give a speech in California and ask Democrats to “tear down this wall?”

That so many states run by liberals are considering such an extreme move is a good reminder: there are no moderate Democrats left.

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