Americans abandoning New York, New Jersey, other high-tax states
Tax burdens continue to weigh on the minds of the nation’s residents, as the highest-tax states saw large outflows of residents last year.
“About 0.47 percent of people have migrated out of New York, which is the highest of any of the 50 states … it’s like 40,000 people,” Dolly Lenz Real Estate Managing Director Jenny Lenz told FOX Business’ Maria Bartiromo, adding that many of them are moving to Florida because “the taxes are so low.”
Meanwhile, the prospect of new taxes on residents is beginning to drive individuals from places they have traditionally flocked to.
California – which used to be a destination for wealthier New Yorkers – is now losing residents to states like Florida, Nevada and Texas, Dolly Lenz CEO Dolly Lenz said, as the state considers implementing an estate tax.
According to United Van Lines’ Movers Study, more Americans left a number of high-tax states, like New York and Connecticut, than moved there last year.
People were migrating, on the whole, to states in the south and west, according to researchers. The reasons they cited for that were lower costs of living, state budgetary challenges, weather, and job growth, among other factors.
Here’s a look at the 2018 trends for some notoriously high-tax states.
New Jersey saw the largest outbound moves out of any state, according to the data, with nearly 67 percent of movers leaving.
Nearly 35 percent of movers left for retirement-related reasons.
When it comes to the break down by income levels, those with incomes between $50,000 and $74,999; $100,000 and $149,999; and $150,000 or more, made up the highest proportion of move-outs.
New Jersey ranked ninth on WalletHub’s list of state-by-state tax burdens, where the total tax burden is an estimated 9.86 percent of income.
Of the moves conducted within Connecticut last year, 62 percent were outbound, ranking it third on the United Van Lines study (behind Illinois, which is also considering implementing a number of new taxes).
About 30 percent of move-outs were decided upon for retirement reasons, while more than 20 percent were attributed to lifestyle decisions.
Those with incomes of $100,000 or higher made up the largest share of exoduses.
In terms of total state tax burden, Connecticut ranked right behind New Jersey on WalletHub’s list, with the average individual paying 9.7 percent of income toward state and local taxes.
Connecticut has recently proposed broadening its sales tax, increasing its capital gains tax and imposing levies on sugary drinks and plastic bags.
New York had the fourth-most individuals fleeing in 2018. About 61.5 percent of all moves were outbound.
About 26 percent of people reported moving out for retirement.
Those with low yearly incomes – below $50,000 – and those with incomes between $75,000 and $150,000 moved out of the Empire State at a high rate, as did those with incomes of more than $150,000.
New York was found to have the highest state and local tax burden of any of the 50 states, with the average individual paying nearly 13 percent of income toward those obligations.
California was not among the top 10 states where residents left last year.
However, the data showed that 22 percent of outbound moves were made for retirement-related reasons, compared to only 10 percent of inbound.
Those ages 65 and older made up the highest proportion of outbound moves, as did those with incomes of at least $150,000 (39 percent). Those with incomes between $100,000 and $150,000 made up the second-highest proportion of move-outs (24 percent).
On average, residents in California pay 9.47 percent of their income on state and local taxes.
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Where were people headed instead?
United Van Lines found that the top destinations in 2018 were Vermont, Oregon, Idaho, Nevada and Arizona. While Nevada charges no income tax, South Dakota and Washington – which also have no income taxes – also made the top 10.