So long, California. Sayonara, New York.
Those are the words of conservative economists Stephen Moore and Arthur Laffer. They are predicting that, under the new Republican tax plan, the wealthy in The Golden State and The Empire State will pay higher taxes because tax changes slash the deduction of state and local taxes to $10,000.
This, they forecast in The Wall Street Journal, will cause 800,000 people to flee these two states by 2021. Other states are not immune to this either, the conservative economists note. Connecticut, Minnesota, and New Jersey will see 500,000 people absquatulate.
“Laffer and Moore say that the effective income-tax rate (what people actually pay) for high earners in California will jump from 8.5 percent to 13 percent. Wealthy Manhattanites would face a similar increase, they say. Those who make $10 million or more will see a potential tax hike of 50 percent or more, according to their analysis,” CNBC writes.
Where will they go? States where taxes are low or do not have any taxes at all. So, states like Texas and Florida would be popular locations to retreat to for affluent Americans.
“In years to come, millions of people, thousands of businesses and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states,” they wrote in the newspaper.
California is a lost cause anyway, while New York is New York.
Leave a Comment