Ask this question at a Minnesota dinner table and you'll get two answers, both shouted. One side says the wealthy are stampeding for Florida and taking the tax base with them. The other side says tax flight is a myth invented by people who want tax cuts. Almost nobody in the argument has read the actual files.
We did. Not a think tank's summary of the data — the data. The IRS publishes state-to-state migration statistics built from actual tax returns, and the Census Bureau publishes annual population estimates. For this article we pulled those primary files and did the arithmetic ourselves. Here is what they say — all of it, including the parts each side would rather skip.
What's true: Minnesota lost high-income households, year after year
From 2018 through 2023 — the most recent year the IRS has released — Minnesota lost tax filers to other states on net every single year. Measured by the adjusted gross income of the people moving, the net loss was about $917 million in 2018–19, worsening to a peak of $2.19 billion in 2021–22, then improving to $1.47 billion in 2022–23.
And the losses are not evenly spread. They are concentrated at the top. In 2022–23, households reporting $200,000 or more accounted for a net loss of 1,773 returns — about 4,460 people — and roughly $1.12 billion of that year's income loss. That's about 74 percent of the total, from a single income bracket. Meanwhile Minnesota actually gained filers in the under-$25,000 brackets. The pattern is exactly what it looks like: the people leaving on net are disproportionately the ones with the highest incomes.
Where do they go? The IRS files answer that too. In 2022–23 the biggest net income losses ran to Florida ($593 million), Arizona ($242 million), and Texas ($185 million). Mostly no-income-tax and Sun Belt states — though also, awkwardly for the pure tax-flight theory, to Wisconsin, which is nobody's idea of a tax haven.
What's also true: the story just turned
If the article stopped there, it would be a Center of the American Experiment press release. It doesn't stop there.
The IRS data lag badly — the 2022–23 numbers were released in March 2026. The Census Bureau's population estimates are fresher, and they show the domestic-migration picture reversing: Minnesota's net domestic migration went from –17,106 in fiscal 2022 to essentially zero in 2024 to +8,300 in fiscal 2025 — the first positive year since 2018. Total population grew every single year of this period and stands at about 5.83 million. Nobody's version of "everyone is fleeing Minnesota" survives contact with that number.
There's a soft spot on this side of the ledger too, and honesty requires naming it: much of Minnesota's recent growth came from international migration, which fell by nearly two-thirds in fiscal 2025 amid federal policy changes. The domestic turnaround is real, but the state's overall growth engine slowed at the same time.
The argument over why — attributed, because nobody actually knows
Here is the most important fact about the IRS migration files: they contain no "why" column. Every causal story you have heard is an interpretation layered on top.
The tax-flight side: the Center of the American Experiment's economist John Phelan notes that Minnesota's losses flow "generally to states with lower taxes" and warns the trend threatens the state's economic health. The Tax Foundation ranks Minnesota 44th on its 2026 tax-competitiveness index, and our top income-tax rate — 9.85 percent, the sixth-highest top rate in the country — kicks in at a threshold that catches a lot of professionals, not just the yacht crowd.
The skeptics: sociologist Cristobal Young studied thirteen years of actual millionaire tax returns and found millionaires move less than the general population — 2.4 percent a year versus 2.9 — and that only about 0.3 percent of them move to a lower-tax state in a given year. Strip Florida out of the data and the tax pattern in millionaire moves largely evaporates, which suggests the draw may be beaches and grandchildren as much as brackets.
And the referee: the nonpartisan Minnesota Center for Fiscal Excellence, whose executive director called this question "an easy one to manipulate" and concluded both sides are "right in different ways." The same organization has quantified the honest core of the problem: at $1 million of income, moving from Minnesota to South Dakota saves a taxpayer on the order of $62,000 a year. Whether or not most people act on that incentive, it exists, it compounds annually, and — as MCFE put it — an economic incentive to leave is also an economic disincentive to ever come.
Two more honest caveats, because our standard on this site is receipts or silence. First, the "$1.5 billion left Minnesota" framing overstates what the data measures: the IRS figure is the post-move income of the people who left, not a wire transfer out of the state's economy — when a surgeon moves to Naples, her practice here doesn't vanish, it hires a new surgeon. Second, Minnesota's newest tax on high earners — the 1 percent surtax on investment income over $1 million, effective tax year 2024 — postdates every year of migration data that exists. Anyone claiming the data proves that tax drove people out is making it up. So is anyone claiming the data proves it didn't.
The one tax where the evidence is strongest
Buried in the research is a specific, fixable item. The academic literature that is most skeptical of income-tax flight — including the NBER work MCFE relies on — finds the strongest migration response to estate taxes. Minnesota is one of only a dozen states that still levy one. Our exemption is $3 million, unindexed, with no spousal portability, against a federal exemption of roughly $14 million. That means a Minnesota family with a $5 million estate — a successful farm, a machine shop, a lifetime of saving — owes Minnesota estate tax while owing Washington nothing, and can erase the entire bill by spending their last years in Naples instead of Nisswa. If you wanted to design a tax that invites exactly the migration everyone claims to worry about, while raising comparatively little revenue, this is what it would look like. An honest legislature would put fixing it on the table.
What we can do: compete on value, and deliver it
Here's the part both shouting sides miss. Minnesota's pitch to high earners — to everyone — has never been "we're cheap." It's "you get what you pay for": a median household income of $92,350 against a national figure around $84,000, a labor force participation rate five and a half points above the country's, one of America's densest concentrations of Fortune 500 headquarters, and a quality of life that CNBC just ranked fifth-best in the nation for business even as the Tax Foundation ranked our tax code 44th. Both rankings are true. That's the deal Minnesota offers: high price, high value.
A high-price, high-value deal survives only as long as the value is real. Every dollar that bleeds out of state programs to fraud, every agency that can't answer for its spending, every year the cost of living outruns paychecks — that's the value side of the bargain eroding while the price stays fixed. You want to keep high earners, young families, and the next generation of headquarters in Minnesota? Then govern like the customer can leave. Because the IRS files just spent five years proving that the customer can.
That is not a tax argument or an anti-tax argument. It's an accountability argument. First the facts — all of them, from the primary files, the flattering and the unflattering alike. Then the fix: a government that treats every dollar as if the taxpayer who sent it had other options. As a consumer-protection attorney, I spend my working life on exactly that principle. Minnesota's government should too.
Minnesota deserves answers — and a government worth its price tag.
Sources
Primary data (downloaded and computed for this article): IRS Statistics of Income, state-to-state migration files, 2018–19 through 2022–23 (irs.gov/statistics/soi-tax-stats-migration-data); U.S. Census Bureau, Vintage 2025 State Population Estimates (NST-EST2025-ALLDATA); Bureau of Labor Statistics LAUS series (MN and U.S. unemployment and labor-force participation, through July 2026); Census ACS median household income via FRED; Minnesota Department of Revenue, 2026 Tax Incidence Study (Mar. 5, 2026); Minnesota House Research, "The Minnesota Estate Tax" (Nov. 2025).
Interpretations, attributed above: John Phelan, Center of the American Experiment (Mar. 24, 2026 and related posts); Tax Foundation, State Income Tax Rates and Brackets 2025 and 2026 State Tax Competitiveness Index; Cristobal Young, The Myth of the Millionaire Tax Flight (Stanford Univ. Press, 2017), as reviewed by ITEP (May 1, 2018); Minnesota Center for Fiscal Excellence, "Minnesota, Millionaires, and Mobility" (Feb. 2014) and Mark Haveman in MinnPost (Dec. 14, 2023); Minnesota Reformer (Feb. 20, 2026); Star Tribune (Feb. 2026); CNBC Top States for Business 2026.
Every figure above comes from the listed source; where sources conflict or data cannot answer a question (like why any individual moved), the article says so. Corrections: campaign@madgettformn.com.