Welcome to Extreme Investor Network, where we provide unique and valuable financial advice to help you navigate the complex world of investing and wealth management. Today, we are diving into the ongoing debate surrounding higher taxes on the wealthy and how it affects interstate migration trends.
According to experts like Jared Walczak, vice president of state projects for the Tax Foundation, there is evidence to suggest that millionaire tax flight is indeed underway. Studies show that there is more movement among the highest-income individuals when states implement tax changes, leading to out-migration in some cases.
Tax policy plays a significant role in influencing migration patterns, as highlighted by Bess Freedman, CEO of Brown Harris Stevens Residential Sales. While some top earners may be inclined to leave high-tax states, it is not necessarily a mass exodus. New York, for example, still boasts over 350,000 millionaires who continue to invest in the city despite tax implications.
Michael Mazerov, senior fellow at the Center on Budget and Policy Priorities, also points out that state taxes may have minimal impact on migration trends overall. While there may be some movement among top earners, there is no concrete evidence to suggest a drastic decline in population in high-tax states like New York.
Looking ahead, the temporary $10,000 cap on the deduction for state and local taxes (SALT) introduced by the Tax Cuts and Jobs Act (TCJA) has been a key issue for residents in high-tax states such as California, New Jersey, and New York. This limitation has contributed to migration patterns and may continue to do so in the future.
With the fate of the SALT cap uncertain post-2025 and pending changes in federal tax policy, it is important to stay informed and adapt your financial strategies accordingly. At Extreme Investor Network, we provide expert insights and guidance to help you make informed decisions about your finances and investments. Stay tuned for more updates and resources to help you achieve your financial goals.