Delafield, Wis. – According to new IRG analysis of IRS data Wisconsin lost more than $4 billion in income in 2023 because people moved out of state. $2.8 billion went to states with a flat income tax or no income tax at all.

More than 88,000 tax filers, similar to the population of Dodge County, left Wisconsin in 2022. Over the last ten years, more than 900,000 filers have left the state, most of them moving to states with a flat or no income tax, taking more than $37 billion in income with them.

That lost income means lost tax revenue, too. Wisconsin missed out on more than $400 million in state and local tax revenue in 2023 alone, and more than $3.5 billion over the past decade.

WHY IT MATTERS: This isn’t wealthy families leaving. Most people who moved to lower-tax states were middle class. The average tax filer who left Wisconsin for a flat or no-income-tax state in 2023 earned about $78,500 — showing that everyday families are leaving for better opportunities and to keep more of what they earn.

THE QUOTE: 

“Wisconsin families and job creators are voting with their feet. Wisconsin can’t out-tax its neighbors and expect people to stay,” said Maryjane Behm, IRG Deputy Director of Policy & Reform. “It’s clear Wisconsin is losing residents to states that let the taxpayers keep more of their own money.” 

WHAT’S NEXT: The incoming legislature and new governor will debate the state’s next two-year budget after the November elections, with a $3 billion surplus on the table. Now is the time for comprehensive income tax reform, including eliminating the income tax, regardless of whether Wisconsinites choose a divided government again this fall.

Recent polling shows 73% of Wisconsinites support eliminating the income tax by 2030. The Wisconsin legislature needs to ensure the badger state doesn’t fall down the same path as California, whose proposed billionaire tax has already resulted in $536 billion leaving the state.