May 2019 – Cities and states with the highest tax rates are facing problems after state and local tax deductions were capped at $10,000 in 2018 as part of the Tax Cuts and Jobs Act. People are leaving – especially the rich.
Limits on itemized deductions that offset exorbitant tax rates have resulted in the wealthy experiencing up to a 66% tax increase. For instance, the tax rate for millionaires in New York City and California moved from about 8% to 13.3%.
Other highest-tax states are Connecticut, Illinois, and New Jersey, which have taken the lead in increasing taxes on the rich in the last three years. The highest percentage of movers are from New Jersey, Illinois, Connecticut, and New York. And California has more fleeing than moving in.
Gov. Andrew Cuomo (D-NY) said it best: “This is the flip side (of) ‘tax the rich, tax the rich, tax the rich.’ The rich leave, and now, what do you do?”
His answer may be found by researching the destinations of those who have moved away: Arizona, Florida, Tennessee, Texas, and Utah – all low-tax states.