Miami… The New Wall Street of the South
A growing list of public officials in high-tax states are expressing alarm that big earners are bolting to low-tax states as new data suggests some home buyers are moving in response to the year-old change in the federal tax law.
According to studies, people moving to the Sunshine State saved a good deal of cash with those moving to Florida with incomes of $100,000 saved $24,649 by moving. Higher earners also benefit by moving to Florida, Codina Partners noted. Someone earning $200,000 can save $49,509 by moving to Florida while those earning $1 million can save $235,197 by moving to the Sunshine State.
Another reason why not only individual but also companies are moving to Florida is because of the federal tax change impacting state and local taxes (SALT) dedications, putting a $10,000-dollar cap on state and local deductions–which hit states like Illinois and New York hard.
New York and Florida are similar in size, population, and racial profiles. Each attracts plenty of immigrants. But years of mismanagement in New York has wreaked havoc on its residents. Imagine you are well into your 50s and have worked in New York for several decades. It is now time to consider your retirement. Individuals planning their golden years must consider how far their hard-earned dollars will go. Staying in New York and shelling out tens of thousands of dollars annually may no longer be viable. Serial abuses of policy, spending, and taxation have left thousands of citizens with the same decision to stay in New York or move to Florida
First, Florida is one of only seven states with no personal income tax, and people we’ve been seeking are in top tax brackets. As New York, Connecticut and other states have raised taxes, Miami’s comparative advantages multiplied rapidly.
Then, with last year’s US tax revamp that capped state and local tax deductions at $10,000, the highest effective state tax rates rose to 12.7% from 7.7% in New York City, to more than 10% from 6.5% in New Jersey, and to 7% from 4.2% in Connecticut. We, of course, had none.
Many states raise tax rates when they’re struggling to collect revenues. The well-to-do and even the not so well-to-do begin looking for ways to minimize their income tax obligations. And some states with income tax also collect state death taxes as well.
When these two taxes are coupled together, it can provide a huge incentive for individuals to look for a more desirable and less taxing place to call home like Florida.
