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Monday, July 21, 2014

Wealthier New Yorkers Are Not Fleeing the City for Tax Havens

New York Times:  Wealthier New Yorkers Aren’t Fleeing the City for Tax Havens, a Study Says, by Sam Roberts:

Sean Hannity, the Fox News prime-time host, threatened last month to leave New York for a tax haven down south. Tiger Woods transplanted himself from California to Florida for the same reason. The actor Gerard Depardieu decamped from France and sought citizenship in Russia after complaining that 85 percent of his income was consumed by taxes. ...

But a new analysis being released Monday undermines the frequent assertion that wealthy people reflexively flee New York City — where Mayor Bill de Blasio campaigned to raise taxes on those who make more than $500,000 — for low-tax states.

The study, by the city’s Independent Budget Office, found that the share of higher-income households that moved from the city in 2012, 1.8 percent, equaled the share of lower-income households that left.

Moreover, the budget office determined that 42 percent of households that made more than $500,000 and left the city in 2012 moved elsewhere in New York State. Another 22 percent departed for New Jersey, which is hardly considered a tax haven and where a so-called millionaire’s tax was imposed in 2004.

The third favorite destination among the wealthy, with 12 percent, was Connecticut, where the Tax Foundation, a nonpartisan research group, estimated that taxpayers typically did not earn enough until May 9, the latest of any state, to pay their total tax bill. Fourth on the list of top destinations was California, where 9 percent of the wealthy households went. That means that 86 percent of the households making $500,000 or more that left the city moved to four states with reputations for high taxes. Only 45 percent of the less wealthy households relocated to those states.

Despite the allure of tropical fishing, only 2 percent of the wealthier households bolted for Florida (compared with 10 percent of households that made less than $500,000, many of them retirees). Just over 4 percent of the wealthier households headed for Texas (as did exactly the same percentage of less wealthy households).

New York City Independent Budget Office, When New Yorkers Move Out of New York City Where Do They Go?:

NYC

NYC 2

New York Times:  Rich People Shrug Off High Taxes, by Juliet Lapidos

(Hat Tip:  Bill Turnier.)

http://taxprof.typepad.com/taxprof_blog/2014/07/wealthier-new-yorkers-.html

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Comments

Maybe this is because rich people have a higher percentage of their assets in disposable cash, so the higher taxes are less of an imposition. In contrast, for the middle class, particularly those on tight retirement income, moving to Florida can make a big percentage difference in their after-tax income. And, don't forget estate tax differences!

Posted by: Andy Patterson | Jul 21, 2014 2:15:59 PM

So it looks like far more New Yorkers fled the City for low-tax (that’s a joke, Woody) California and New Jersey than for Florida.

Posted by: Publius Novus | Jul 22, 2014 6:27:19 AM

Is there reliable data on wealthy people not residing in N.Y. failing to come to N.Y. but instead choosing when they do move to go to lower (than N.Y., Calif., N.J. etc.) taxing jurisdictions?

Posted by: Joseph W. Mooney | Jul 22, 2014 6:39:34 AM