Could GOP Tax Bill cause wave of millionaires to states like Florida?

[orange87]

There is a widely held belief that high income earners move from states with high taxes to states with low taxes. According to a study published in the "American Sociological Review," it's true that taxes do play a role in where high income earners lives, but not to the extent that most people would think... except in the case of Florida. Dubbed "the Florida effect," for reasons that's experts can't explain, Florida is an anomaly wherein it has a net in-migration of millionaires from nearly every state in the U.S., especially those states with higher taxes. And experts say that elimination of state and local tax (SALT) deductions under the new GOP tax bill, will cause an exodus of millionaires out of high tax states like California, New Jersey and New York to lower tax states, particularly Florida.

Personally, this makes me very happy. Florida has one of the fastest growing economies in the nation. The quality of life is rapidly improving here while other states seem to be declining. Millionaires (and even billionaires) moving here will invest in our economy and increase our tax revenue. The sunshine state has a bright future ahead of it!

[Boomer136]

Perhaps then Orlando could support more than 1 2200+ seat theater for touring broadway, and a really strong performing arts community, y'know, like Cleveland.  

[bulldogger]

I think this argument makes sense when you talk about retirees.  Otherwise, you generally need to be where the paycheck tells you to be... even if you make $1 double comma per year.

[spenser1058]

A few years ago, Florida Trend had posted a list of the 50 counties in the US with the largest number of millionaires and OC had recently broken on to the list. It would be interesting to see where we are now. Palm Beach, of course, is one of the wealthiest places in the country as are areas in Southwest Florida like Marco Island to name a few. Generally, that wealth has not made it back to the average Floridian as the wealthy, if they do contribute, are more likely to do charities back home than in Florida unless they are here long enough to feel a part of the community. Meanwhile, as for quality of life, most of the wealthy are loathe to support education and services at the state level (Florida has been slipping for years). An excellent example of this is our current governor who is a wealthy Southwest Floridian who just moved here a few years ago and has regularly moved to cut the budget and supported taking away home rule.

[orange87]

1 hour ago, bulldogger said:

I think this argument makes sense when you talk about retirees.  Otherwise, you generally need to be where the paycheck tells you to be... even if you make $1 double comma per year.

I think that's true for some high income earners, but I think once someone reaches a certain level of wealth, they become the ones writing the pay checks.

1 hour ago, spenser1058 said:

A few years ago, Florida Trend had posted a list of the 50 counties in the US with the largest number of millionaires and OC had recently broken on to the list. It would be interesting to see where we are now. Palm Beach, of course, is one of the wealthiest places in the country as are areas in Southwest Florida like Marco Island to name a few. Generally, that wealth has not made it back to the average Floridian as the wealthy, if they do contribute, are more likely to do charities back home than in Florida unless they are here long enough to feel a part of the community. Meanwhile, as for quality of life, most of the wealthy are loathe to support education and services at the state level (Florida has been slipping for years). An excellent example of this is our current governor who is a wealthy Southwest Floridian who just moved here a few years ago and has regularly moved to cut the budget and supported taking away home rule.

Rich people most certainly do contribute to the states they live in. A good example of this is when billionaire David Tepper left New Jersey and moved to Florida. The amount of tax revenue this one guy alone was responsible for generating for the state of New Jersey was so great, that the state of New Jersey PLEADED with him not to move as they predicted huge state budget problems because of him moving.

[spenser1058]

What you neglect to remember is Florida has no income tax, which is why it's attractive to the wealthy in the first place. In the aggregate, the other taxes they pay given the various exemptions available, has not amounted to a windfall for us. If it were, we wouldn't be competing in the lower to mid half of the range of education and services.

Another thought if we're getting anecdotal: three of the wealthiest men in the world, Bill Gates, Jeff Bezos and Warren Buffett, if what you propose is correct, should be living in Florida. None do, even though Bezos lived in South Florida as a kid and it would have made sense to place Microsoft in Boca when he was initially working closely with IBM. They didn't. In fact, Gates and Buffett both ended up preferring the area they came from. I'd suggest that loyalty to your background is often a more important factor than taxation issues. In fact, we know corporate hq's founded in a given city are more likely to invest in their communities than those that move because of incentives.

[jack]

It does not hurt but the people that can move tend to have passive incomes. Those folks probably already have a home here and claim residency. 

The taxes the wealthy pay do amount to a windfall for us, We tend to have high property taxes and the wealthy love Florida and show that by buying 2nd, 3rd, etc, homes. Homes that pay high property taxes. State and local. 

 

But on another note, I think the SALT elimination is bs. 

 

 

[aent]

43 minutes ago, jack said:

It does not hurt but the people that can move tend to have passive incomes. Those folks probably already have a home here and claim residency. 

The taxes the wealthy pay do amount to a windfall for us, We tend to have high property taxes and the wealthy love Florida and show that by buying 2nd, 3rd, etc, homes. Homes that pay high property taxes. State and local. 

 

But on another note, I think the SALT elimination is bs. 

 

 

My understanding is they did not limit it, but capped it at $10k. I support its elimination, as it encourages higher local taxes to reduce the taxpayers liability to the feds. Someone who makes more in California or NY gets to pay less federal taxes and keep more of their money in state. That just doesn't seem right, we all live in the US, we should pay equal federal taxes. I'd rather its total elimination, but the compromise seems fair enough and better then what we have now.

[JFW657]

On 11/30/2017 at 4:04 PM, orange87 said:

There is a widely held belief that high income earners move from states with high taxes to states with low taxes. According to a study published in the "American Sociological Review," it's true that taxes do play a role in where high income earners lives, but not to the extent that most people would think... except in the case of Florida. Dubbed "the Florida effect," for reasons that's experts can't explain, Florida is an anomaly wherein it has a net in-migration of millionaires from nearly every state in the U.S., especially those states with higher taxes. And experts say that elimination of state and local tax (SALT) deductions under the new GOP tax bill, will cause an exodus of millionaires out of high tax states like California, New Jersey and New York to lower tax states, particularly Florida.

Personally, this makes me very happy. Florida has one of the fastest growing economies in the nation. The quality of life is rapidly improving here while other states seem to be declining. Millionaires (and even billionaires) moving here will invest in our economy and increase our tax revenue. The sunshine state has a bright future ahead of it!

I think another thing that has attracted more than a few out of state millionaires here, is the fact that along with our low taxes, Florida has among the toughest homestead laws in the country.  Florida has become known as a bankruptcy haven because here, your primary residence is protected from any and all creditors. A millionaire can move to Florida, invest large sums of money into an expensive house and property, then file bankruptcy and nobody can touch it.

As for the contributions these wealthy newcomers make to our quality of life, keep in mind also that these people also tend to be the ones who ignore things like water use restrictions. They purchase homes in ritzy neighborhoods like Alaqua  and Isleworth, then dump tens of thousands of gallons of water per month onto their lawns, along with tons of fertilizer that runs off into the storm sewers and ends up in our lakes, just to keep them looking like golf course putting greens.

Double edged sword, for sure.