Archive for the ‘Tax migration’ Category

Uh-oh: The end of Florida as a tax haven?

October 26, 2018

A lot of friends have packed up and moved to Florida.

Some say it’s because of the winter weather.

Most concede that it’s because of the favorable state tax structure.

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Andrew Gillum is a far  left progressive … even to the left of Bernie Sanders.

He advocates extensive government spending on social programs … think: Medicare for all and expansion of Medicaid.

His campaign is built around the “power of free”.

It’s relatively silent on the details of paying for the freebies.

So it surprises me is that I haven’t heard any chatter about the inevitable rise in taxes if Gillum gets elected governor.

Maybe, the FL legislature will still be controlled by the GOP … containing any tax increases in the short-run.

But, eventually the tax piper will need to be paid if the majority of Floridians vote for big spending.

All of which raises the question: what happens when a tax haven turns Blue.

Uh-oh.

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Tax Migration: Which states are losing income? Which are gaining?

January 30, 2018

A friend alerted me to a very cool web site called How Money Walks

Stated simply, the IRS captures data from income tax returns – tracks year-to-year changes in the filer’s address (intra or inter-state) – aggregates the data by county (and state) – and calculates the net movement on AGI in and out.

Below is the overall, U.S. map – red indicates a net income outflow; green indicates a net income inflow.

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click to go to the How Money Walks interactive map
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No surprise, Florida is the big winner with a cumulative annual AGI inflow of $156 billion.

New York is the big loser with a a cumulative annual AGI outflow of $99 billion

Drilling down is where things get interesting.

For example ….

Florida’s increase net inflow has been on a steady rise.

Most of the “new” money is from high tax & spend states: New York, New Jersey and Illinois.

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On the flipside, New has had a steady net income outflow to low-tax Florida and North Carolina … and its sisters in the Tri-State area – New Jersey and Connecticut.

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If you want to get more granular, How Money Moves lets you drill down to the county levels to track movements.

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To have some fun slicing and dicing,  go to the How Money Walks website and just point & click.

WARNING: Playing with this data can get addicting.

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Thanks to GFB for feeding the lead.

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California braces for outbound migration of fat cats…

January 23, 2018

Loss of SALT deduction may be the straw that breaks the camel’s back.

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Last week, we reported some moving data from United Van Lines that indicated “moving deficits” in high tax & spend states: Illinois, New York, New Jersey, Connecticut, Massachusetts.

See Northeast states continue to experience a “moving deficit”…

We expressed surprise that California was rated as “neutral” not “outbound”.

Well, according to the Sacramento Bee, it’s just a matter of time.

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Even Gov. Jerry Brown has observed: ““People with higher incomes will pay a lot taxes (when SALT taxes deductions are cut), and some of them may be tempted to leave.”

That’s a problem because “The state’s wealthiest 1% pay 48 percent of its income tax, and the departure of just a few families could lead to a noticeable hit to state general fund revenue.”

In the past, California passed tax increases with impunity, assuming that “elites are embedded in the regions (like California) where they achieve success, and they have limited interest in moving to procure tax advantages.”

Now, that’s not a certainty, and the state is considering some very creative (and, somewhat laughable) ways to offset the likely drop in individual tax receipts ….

(more…)