New Jersey’s fiscal picture took a turn for the worst when it was announced that resident hedge fund billionaire David Tepper was exiting the state. This was very interesting because the state relies heavily on income taxes, and the top one percent pay for a large chunk of those taxes.
Here is a snippet from a Bloomberg News article:
“New Jersey relies on personal income taxes for about 40% of its revenue, and less than 1% of taxpayers contribute about a third of those collections. A one percent forecasting error in the income-tax estimate can mean a $140 million gap.”
This just shows that the rich can get up and leave a state or a country whenever they feel like. Billionaires leaving a high-tax state can pose a potential threat to deeply indebted, big government states, such as New York and California.
According to Forbes magazine and Zero Hedge, these are the states with the highest number of billionaires today:
Of course, California and New York are two of the highest taxed states in the country.
There are currently more than 500 billionaires in the U.S. with a combined net worth of just under $2.4 trillion. This is more than any other nation in the world today. In other words, the U.S. relies heavily on these billionaires for tax collections. It’s a friendly reminder that the U.S. government would be in deep trouble once these billionaires just picked up their bags and went somewhere else.
No one is reading this blog, how come?