Texas Among Top 10 States Where Upper-Middle Class Is Moving

AUSTIN, TX — Texas is the ranked 2nd among states where the growing upper-middle class is moving, according to a new report.

The demographic now represents 12 percent of all American households —up from 10 percent nearly 40 years ago — according to a SmartAsset study. The growing, high-earning segment is on the move, migrating across state lines potentially looking for job opportunities, attractive housing markets and/or lower tax liabilities, researchers found.

To find the top places where upper-middle-class people are moving, SmartAsset analyzed the most recent IRS data on inflows and outflows of people with incomes between $100,000 and $200,000 in every state and the District of Columbia.

The upshot: Texas ranked high among the top 10 destinations, securing the second overall spot sandwiched between Florida and Arizona. According to the report, Texas saw a net gain of 6,706 upper-middle-class people from 2017 to 2018. "Again, the lack of income tax in the Lone Star State may account, in part, for this influx," researchers noted.

Graphic courtesy of SmartAsset.

Among the report's key findings:

• The South and West dominate the top of the list. According to U.S. Census Bureau regional divisions, half the top 10 states are in the American South (Florida, Texas, North Carolina, South Carolina and Tennessee), and the other half are in the West (Arizona, Idaho, Nevada, Washington State and Colorado).
• Upper-middle-class Americans are gravitating toward tax havens. Four states in the top 10 — Florida, Texas, Nevada and Washington — have no income tax. Two other states — North Carolina and Colorado — have a flat rate income tax. Furthermore, Tennessee does not have a personal income tax but does tax some dividends and interest.

Read the full SmartAsset report that includes methodology and key findings.