CEA finds states that cut income tax would see a significant influx of high-income taxpayers

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The CEA's published analysis reports a 'significant influx' of new high-income taxpayers to states under the modeled income-tax phase-out scenarios.

Source summary

A White House (CEA) research paper examines the economic effects and feasibility of states phasing out personal income taxes. It models two scenarios—full revenue replacement through broadening the sales tax, and replacement combined with limits on spending growth—and reports state-by-state impacts on GDP, wages, startup formation, and high-income migration. The CEA finds average gains such as a 1–1.6% rise in state GDP, 16–19% more startups, a $4,000 increase in average wages, and estimated average state sales tax requirements of under 8% (or 6.2% with spending limits).

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Latest fact check

The Council of Economic Advisers' January 28, 2026 White House research note and the report PDF list as a key finding: "A significant influx of new high-income taxpayers." The CEA report presents that phrase verbatim in its Key findings and describes state-by-state quantitative modeling of phase-out scenarios that produces migration effects. Because the phrase appears explicitly as a headline finding in the CEA publication, the claim is accurate. Verdict: True — the statement matches the CEA report's stated key finding and is supported by the report itself.

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Timeline

Update · Jan 29, 2026, 01:54 AMTrue
The Council of Economic Advisers' January 28, 2026 White House research note and the report PDF list as a key finding: "A significant influx of new high-income taxpayers." The CEA report presents that phrase verbatim in its Key findings and describes state-by-state quantitative modeling of phase-out scenarios that produces migration effects. Because the phrase appears explicitly as a headline finding in the CEA publication, the claim is accurate. Verdict: True — the statement matches the CEA report's stated key finding and is supported by the report itself.
- https://www.whitehouse.gov/research/2026/01/the-economic-impact-of-state-income-tax-elimination/
- https://www.whitehouse.gov/wp-content/uploads/2026/01/The-Economic-Impact-of-State-Income-Tax-Elimination.pdf
Original article · Jan 28, 2026
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