They’re Voting with Their Feet!

by Kerry Lutz
Financial Survival Network

It’s official, they’re voting with their feet! Upon passage of the new tax law, FSN foresaw a human exodus from high tax to low tax states. The left wants you to believe that people move to Florida and other low tax environs for the weather. Gov. Andrew Cuomo, has acknowledged that the new tax law is costing New York State bigly. Cuomo blames it for a $2.3 billion budget gap. This is a direct result of the $10,000 per annum ceiling on deducting state and local taxes (SALT).

From our perch in northern Palm Beach County Florida, we’re witnessing over-taxed Northeast migrating in masse to our corner of paradise. In our newly built community, the number of New York, New Jersey and Connecticut license plates is astounding. It appears that anyone who could flee, has moved here. Florida’s has experienced a 5% population spike since 2015, when it pulled ahead of New York State to become the third most populous state.

This process is being repeated in the income tax free states of Nevada and Washington that provide a haven from over-taxed and regulated California. They’re experiencing high growth rates too.

The trend has been going on for many decades and the SALT limit has exacerbated it. We will get a more exact idea of the law’s impact in the 2020 census, when the high tax states’ losses become even more apparent.

California Governor Gavin Newsom has yet to fess up like Gov. Cuomo, but expect it soon. The evidence is overwhelming that many Californians are emulating their Northeastern brethren in rushing for the exits. Nationally, the prime beneficiaries of this migration are the states that charge and little or no personal income tax. These include Florida, Texas, Tennessee, Arizona, Nevada, Washington state, South Dakota, Alaska, and New Hampshire. While no one is rushing off to South Dakota or Alaska, the other states on the list are booming. Liberalism’s runaway costs have become impossible to hide.

We have been predicting this very course of events from the moment the tax law passed. The so-called working rich, such as attorneys making $500,000 or more per year, got hit squarely between the eyes by the new tax law. In New York City we often encounter people making $500,000-$1 million per year, living almost paycheck to paycheck. Usually they are employees who have little ability to write off other many expenses. They pay huge state income taxes and high real estate taxes. For them, the law packed a double whammy.

Nancy Pelosi and Chuck Schumer’s refusal to negotiate with their Republican peers is the direct cause of this disaster. Had they been willing, the limitation on SALT could have been raised to $25,000-$50,000 per annum. Their recalcitrance has done a great disservice to their constituents. Unfortunately, most Americans are not well-informed enough to hold those responsible accountable. Instead, they will hold Pres. Trump personally responsible for this state of affairs, when it’s their own representatives who were the proximate cause of the disaster.

We won’t pass on the wisdom of limiting this deduction, because it’s more complicated than the on-going debate of high tax versus low tax states. For decades, low tax states were subsidizing high tax states. There is an argument to be made as to the equity of eliminating or limiting the SALT deduction. For decades, having been a resident of the People’s Republic of New York, we personally profited. Now, It would be now hypocritical to come out in favor of the limitation.

In the end we can all make our own judgment calls as to the law’s fairness. But the effects of its passage were quite apparent from the start. And so is your choice, stay in your high tax state and continue to subsidize rampant corruption and incompetence, or flee to a low tax state and keep a lot more of your hard earned wealth.

Regards,
~Kerry.

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