Maybe you shouldn’t support that Republican tax plan brewing in Washington D.C. Apparently, by changing the tax code, it could chase away even more of Connecticut’s top earners.
Bloomberg says Connecticut, New York, and New Jersey stand to lose the most high income earners should the tax plan go through. By restructuring the tax code, it means those making over $1,000,000 will then owe an ADDITIONAL$21,000 to the IRS.
Pair that with the Tri-state area’s soaring income tax, those high earners will definitely feel the urge to move elsewhere.
Meanwhile, Florida seems ready to become the new hub of millionaires and billionaires. For the past several years, several of the nation’s highest earners moved south due to them having no income tax. On top of that, snowbirds loved the concept of not having to shovel snow for three months straight.
The fact is, should the Republican tax bill move forward, it’ll punish New England. Especially our most valuable residents that help keep the state afloat with their tax dollars.
On top of that, you won’t see that much of a tax cut, either. The new tax plan aims to slash the Federal tax deduction we claim each year on our taxes. Sure, it’ll raise $1.3 trillion in revenue, but it stands to punish democratic stronghold states.
And, as we all know, Connecticut is Smurf blue when it comes to elections.
Since Connecticut has some of the highest taxes in the nation, our highest earners claim much higher deductions. Take those deductions away, and the states lose a key bargaining chip to keep their highest earners here.
Hence, why Florida seems to be the perfect destination for the disenchanted rich.
As it stands, 4 percent of New York’s top earners said they’d move to Florida should the tax plan become law. That number stands to grow if President Trump signs it into law.
While most Northeastern states rallied against the tax plan, Florida openly welcomes it. In fact, the Miami Downtown Development Authority plans on throwing a party! 9 out of the 10 states with the highest tax burden voted Democrat in the last election.
Jeff Miller, director of luxury sales for Brown Harris Stevens in the Miami area, says more Northeasters began calling him to step up their property search in his area.
“Usually it’s a snowstorm that would push them to pick up the phone. The tax plan has the same effect.”
Another real estate developer invited likely New England transplants to the Art Basel show. Nitin Motwani, who expects a crowd, plans to highlight Florida’s relatively low state and local taxes. In his words, the new tax code “begs” high income earners to move away from democratic stronghold states.
And, should that happen, Connecticut’s fiscal crisis will turn into a death spiral for sure since our lawmakers rely on the income tax to stay afloat.
David Silver, a senior manager at accounting firm MBAF in New York, says people shouldn’t panic too much. He says that while some people will possibly move due to the new tax code, they won’t be the majority:
“I would argue it’s probably not all that likely to uproot your family, leave your friends, and put your kids in new schools just because of proposed tax changes.”
But, that prediction stands for the Northeast as a whole. Connecticut experts say the state may be the exception. Connecticut’s capital, McGuire, predicted:
“There is a certain amount of burying one’s head in the sand and naivete in Hartford. I don’t think they believe it can happen.”
Meaning, while New York and New Jersey representatives already started to look into ways to lessen the fiscal burden of their breadwinners, Connecticut seems content about how things are.
Either way, should this new tax code come into play, things will get very interesting in our state. What do you think will happen? Is Bloomberg simply rallying against the tax plan because it’s a left leaning newspaper? Or, does the article have a point that the budget penalizes Democratic states?