The new federal tax structures signed into law by President Trump hurts New York by limiting state and local tax deductions for its high income earners and widens the cost disparity with Florida — which has no state income tax.
Florida, already a magnet for New York retirees, is aggressively wooing businesses and wealthy residents here to relocate to the Sunshine State and benefit rather than get punished by the new law.
The fear of a stampede of well-to-do New York taxpayers to Florida and other lower tax states is real, said a rep from the city’s top business advocacy group.
“Yes they are actively poaching and yes change of residence is easy,” Kathryn Wylde, president of the New York City Partnership, said of her Florida counterparts.
Many affluent New Yorkers already have second homes in Florida — so much so that New York hospitals such as NYU Langone and Mt. Sinai have opened up medical clinics there to tend to them.
Even the loss of a few hundred millionaires could wreak havoc on city and state budgets. The top 1 percent of earners account for nearly half of all Big Apple income tax revenue that help fund services for the government, the Partnership said in an analysis of the impact of the new federal tax law.
The study showed that a typical family of four that earns $175,000 in the city will pay 25 percent of their income in taxes, compared to 14 percent for the same family of four in Florida. A Florida single resident making $10 million gets $227,619 in tax relief, while the same earner in New York gets socked with $257,177 tax hike because of the loss of SALT, under the new law.
Economic development officials in Palm Beach County — home to Trump’s Mar-A-Lago estate — are salivating.
“The new Trump tax law is helping with our recruiting. New York is taxing the rich. Palm Beach is rolling out the red carpet,” said Kelly Smallridge, head of the Palm Beach County’s Business Board.
Florida Gov. Rick Scott told The Post he’s urging New Yorkers fed up with high taxes to come on down.
“I want to personally welcome anyone escaping high tax states to join the hundreds of thousands of their former neighbors who have already moved to Florida,” Scott said.
Florida Chamber of Commerce Mark Wilson said the new federal tax law that curbs state and local deductions exposes New York’s “Robin Hood” system of taxation as a “fraud.”
“People who run companies or have the ability to move are realizing they don’t have to wait to retire to move to Florida,” Wilson said. “Billions of dollars of income is moving into the state. New York is a huge source.”
New York Gov. Cuomo complained last week the $10,000 limit of deductibility of state and local taxes — including property taxes — “will undo all the good work we’ve done and it’ll make us much less competitive” He’s proposed shifting the state’s revenue collections from the income tax to a payroll tax or charitable donation — both of which are deductible — to shield wealthier residents from a tax hike. It’s unclear whether such a radical change would pass muster.
“A lot of property taxes are above $10,000. And the people who are above tend to be wealthier people, tend to be business owners, we don’t want them to leave. Businesses leave, wealthy people leave and that tax burden falls on everybody else,” Cuomo said.
Source: AllNews Web