When you take a look at the raw numbers, they’re quite startling. People (particularly wealthy people) who move to Florida from high-tax states can knock thousands of dollars off of their annual tax bills. States such as New York, New Jersey, Connecticut and California are seeing an exodus of high-income earners – especially in light of recent tax reform at the federal level which capped the state & local tax deduction (SALT), which effectively subsidized these states’ high taxes. A recent article in the Wall Street Journal (reposted on Realtor.com) highlights this growing phenomenon and how it is affecting shifts in population from high- to low-tax states.
“Escaping state income taxes is a big part of the reason, but the federal Tax Cuts and Jobs Act of 2017 also plays a role. The law limits deductions on state and local taxes as well as the mortgage-interest deduction on federal tax returns. Factor in Florida’s lower cost of living relative to high-tax states, and the decision to move gets even easier.”
“I have to admit that I was surprised by how much of a financial savings” is achieved by moving to Florida. “It is crazy money,” says Connor Lynch, chief executive of Plastridge Insurance Agency based in Delray Beach, Fla.