A growing wave of Washington state residents alienated by the prospect of a steep new income tax being enacted are saying “sayonara” to the far Northwest state and heading south to new homes and futures, according to an analysis by the National Taxpayers Union (NTU).

“No state is a better case study in how tax-and-spend policies can devastate a once-prosperous and competitive state than Washington. Before 2020, Washington consistently gained more new residents from interstate migration than it lost. Starting in 2017, that positive trend rapidly began to slow, then flipped upside down,” writes NTU’s Andrew Wilford, director of State Policy.

The biggest beneficiaries of Washington residents fleeing high taxes include Texas, Arizona, Florida, Idaho, and Tennessee, followed by Montana, South Carolina, Georgia, North Carolina, and Oklahoma. The gain per state in former Washington residents ranged from 9,141 going to Texas and 1,170 to the 10th-place Oklahoma. Those figures are based on U.S. Internal Revenue Service (IRS) data.

President Donald Trump won all 10 of those states in his 2024 bid for a second term in the White House. There are Democratic governors in only two of the 10 states, including Arizona and North Carolina, but both of those states have Republican legislatures. 

Washington state residents began leaving three years ago when the state’s Democratic leaders enacted a new 7% tax on capital gains. “Calling it an ‘excise tax on capital gains,’ proponents managed to hoodwink the state Supreme Court into overturning a lower court decision striking down the tax. Now, emboldened by this piece of legislative legerdemain, state legislators are trying to deal with the latest consequences of rampant overspending by dropping all pretense and simply enacting an income tax,” Wilford explained.

The new income tax — S.B. 6246 in the Washington state Senate — was approved by the Senate on a 27-22 vote. The state senate has 30 Democrats and 19 Republicans. Democratic Governor Bob Ferguson has promised to sign the measure if it reaches his desk. The bill would establish a 9.9% tax rate, but there is a $1 million standard deduction, which effectively targets residents in the highest tax brackets. The effective date is 2029.

Interestingly, Washington state voters have a long-established antipathy to income taxes, having rejected such proposals on election days in 1934, 1936, 1938, 1942, 1944, 1970, 1972, 1975, and 2010. The state constitution requires all taxes to apply equally to property, which is defined to include income.

“An odd wrinkle is that Democrats in Washington’s legislature signed into law a ban on income taxes back in 2024. This, however, was done to forestall a ballot initiative that had a high likelihood of earning voter approval and would be difficult to circumvent. S.B. 6246 simply exempts this new millionaire tax from that ban,” Wolford notes.

And as Wolford further observes, Washington state officials have also approved bigger budgets year after year. “Coinciding with this exodus is a sudden and stark pivot toward tax-and-spend policies,” he writes. “Between Fiscal Year (FY) 2005 and FY 2016, state budgets increased by an average annual rate of 4.1 percent. From FY 2017 through the end of this year, budgets have increased by more than double that amount—an average of 9.2 percent. Tax collections are set to more than double between 2017 and 2029, even before factoring in this new income tax.”

The NTU study was published on March 10, one day after a separate analysis by Virtual Capitalist of net migration gains and losses per 10,000 residents for all 50 states in 2025. The net migration in 2025 results show strong gains across Southern and Mountain West states, including South Carolina on top with a 79.7% increase. Second came Idaho with a 63.2% increase, followed by Delaware at 54.5%, Tennessee at 43.6%, and Alabama at 36.6%. Seven of the top 10 gainers are in the South and Mountain West.

The biggest losers are the solidly Democratic jurisdictions, including California, Washington state, New York, Massachusetts, Illinois, and New Jersey, according to the data compiled by Virtual Capitalist.

“Nowhere on the West Coast saw a bigger drop than California, which saw a net migration loss of -25.1, as nearly 100,000 residents left behind the increasingly unaffordable state in favor of cheaper neighboring states like Nevada, which lacks a state income tax,” Virtual Capitalist reported. California is known informally as the “U-Haul State” as a result of the continuing population exodus.

California also has the steepest individual marginal tax rate among the 50 states at 13.3%, with New York next at 10.9% and Minnesota third in the nation at 9.9%. Washington state would join Minnesota at third-highest in the nation if state legislators approve the proposed income tax.