Here's how much New York taxpayers fleeing to Florida can save
Some Americans are leaving higher-tax states in favor of low-tax options, like Florida and Texas, but just how much are these relocations actually saving taxpayers?
Turns out for some, the answer could be a lot.
Carrie Baron, co-founder of Miami-based Baron Strohmenger, told FOX Business that clients leaving high-tax states and moving to states like Florida – which collects no state-income tax – save an average of about 13 percent on their tax bills.
Baron worked with two separate plastic surgeons who were able to save even more. One of the doctors relocated from Connecticut to Florida and saved nearly $28,000 in taxes, she said. Another moved to Florida from California, and saved about $28,340.
According to data provided to FOX Business by Geoffrey Weinstein, special counsel in the Tax, Trusts & Estates Department of Cole Schotz, an individual or couple earning $650,000 in ordinary income could save $69,719 per year by moving from New York to Florida.
Individuals leaving New Jersey for Florida could save more than $58,300 annually.
Both of Weinstein’s estimates assume $20,000 in property taxes.
Baron said the biggest driver of relocations is the $10,000 cap on state and local tax (SALT) deductions. However, she noted wealthier taxpayers are also getting hit with capital gains and estate taxes, too.
Data from the U.S. Census Bureau showed that while Florida received more movers than any other state last year, New York's outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.
Florida is often an ideal destination for wealthier people looking to leave because it not only has low taxes, but it has a vibrant business community in cities like Miami.
As previously reported by FOX Business, Miami is one of the cities that has ramped up efforts to recruit people that have been hurt by the cap on SALT deductions. There at least two campaigns in Miami alone, targeting both New Yorkers and Chicagoans.
New York’s Democratic Gov. Andrew Cuomo has said he expects the cap on state and local tax deductions to have a negative impact on the state’s population – and tax receipts. He blamed a $2.3 billion budget deficit on the new tax law, calling the state’s financial situation “as serious as a heart attack” as wealthy residents leave.
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Meanwhile, the exodus from high-tax states could continue to heat up. Many experts told FOX Business they saw a spike in inquiries about establishing a new domicile during tax season, when taxpayers began to see the financial repercussions before their eyes.
Baron said the trend will continue, specifically among wealthier residents.