New Yorkers with six-figure salaries who fled to Austin have saved between $65,000 and $260,000 a year due to lower taxes and cheaper cost of living

A worker earning $650,000 in Manhattan would have saved more than $250,000 per year by moving to Austin, Texas, due to lower taxes and cost of living, a new study finds.

Six-figure earners can save more than 40 percent of their salary and shave up to 10 percentage points off their effective tax rate by making the move from New York to Austin, according to research from SmartAsset published on Thursday.

The study compared cost savings for high earners moving from either Chicago, San Francisco, or New York to Austin, and found that the savings were the greatest for New Yorkers.

That’s due in part to New York’s sky-high cost of living, which is 122 percent higher than the US average, whereas Austin is in line with the national average. 

Austin also offers much more favorable tax rates, a difference that is mainly due to the lack of a state income tax in Texas.

While high earners in New York are taxed at an effective rate between 37 percent and 45 percent, in Austin they would be taxed in a range from 27 percent to 35 percent for the same income levels.

For a New Yorker making an annual salary of $150,000, the yearly savings from moving to Austin would total $64,811, the study found.

Housing costs are a significant contributor to the difference in cost of living between New York and Austin.

According to Realtor.com, the median home listing price in New York is $819,000, compared to $675,000 in Austin. 

SmartAsset also found that high-earners in San Francisco could save significantly by moving to Austin, though the difference is not as large as a move from New York.

Overall, six-figure earners would save about 33 percent by moving from San Francisco to Austin. 

Meanwhile, the difference between moving from Chicago to Austin are less impressive. 

While taxes are lower in Austin, the difference is almost cancelled out by Chicago’s lower cost of living, and high earners could only expect to save 11 to 12 percent of their income by making the move. 

Housing costs are a significant contributor to the difference in cost of living between New York and Austin, while Texas’ lack of a state income tax also benefits workers

Austin, which is known for its eclectic live-music scene, is cheaper to live than New York 

Texas has seen a population boom in recent years, driven in part by an influx of wealthy new arrivals moving in from the Northeast.

The Lone Star State added 470,708 residents last year, joining California as the only two US states with more than 30 million people.

From April 2020 to July 2022, New York and California saw the biggest net decreases in residents, each losing more than 500,000.

The shifts reflect an internal migration of substantial proportions, fueling booming population growth in the South that could have economic and political implications for decades to come.

Experts cite a confluence of factors, including the rise of remote work, pandemic health fears about dense urban areas, and concerns over housing costs, high taxes and crime for driving a flood of internal migration toward Sun Belt states.