High-tax states are already taking a hit from next tax law: Varney

By OpinionFOXBusiness

Why would anyone who makes money buy a home in NYC: Varney

FBN's Stuart Varney on the tax reform legislation's impact on high-tax states such as New York and New Jersey.

This looks bad for the high-tax states: they are already taking a hit from the new tax law.

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In Manhattan, New York City – chock full of 1-percenters – condo and co-op sales are down 25% in the first three months of this year. And that’s on top of a big decline at the end of last year. I understand that our viewers will not lose much sleep over Manhattan real estate, but the Democrats who run New York, New Jersey and California are worried stiff.

You see if you make good money, and you live in those states, you face a whopping tax payment increase, because only a small fraction of state and local taxes are deductible on your federal return.

Why would anyone who makes money buy a home in New York City? Why would you do that? Just by becoming a Manhattan resident, you are guaranteed to pay a lot more tax. No wonder high-end real estate sales are dropping like a stone!

And don't think you can move to New Jersey to escape. The new tax law slams New Jersey harder than any other state! More than 10% of all New Jersey households will pay more – that is 300,000 households. New Jersey people already pay high taxes and the governor wants another tax hike! And if you want to get out, the state will charge you an exit fee! Why on Earth would anyone who makes good money buy real estate and move to New Jersey?

You are going to hear a lot more about this as the bad news sinks in. As we said, high-tax states are getting clobbered, and it’s a double shot: As the decline in Manhattan real estate sales shows, people are not moving in. Just wait till we see the numbers for people moving out.

After decades of Democrat-led tax and spend by New York, New Jersey, California and others, the tax chickens are coming home to roost. The damage to these states will be severe, and the win for low-tax Florida, Texas, Nevada, Tennessee and others, will be huge.