More Wealthy Migrate South To Avoid Tax Hikes
August 10, 2010
For years, wealthy retirees from high-tax states in the Northeast and Midwest have been streaming to sunny, low-tax Florida. That stream is now turning into a flood, says Investment News.
"We haven't had a situation like this in quite a few years," says Greg Rosica, a tax partner at Ernst & Young LLP.
"We have this impending tax increase and people are looking for ways to hide from that, but they're not seeing many from the federal perspective. One of the ways they're looking to do it is changing their state income tax rate," says Rosica.
- In addition to Florida, the states that don't tax income are Alaska, Nevada, South Dakota, Texas, Washington and Wyoming; New Hampshire and Tennessee tax only dividend and interest income.
- Many states also impose their own estate taxes, which will only add to the tax burden of those who will be subject to a federal estate tax if it is revived.
- In New York, the marginal state individual income tax rate on those who earn more than $500,000 a year has gone from about 7 percent last year -- when Buffalo Sabres owner Tom Golisano said he was exiting the state for Florida -- to almost 9 percent this year.
"This move to no-tax states is absolutely big business," says Thomas Handler, a partner at the law firm Handler Thayer LLP. "People are doing it all day long, and it's ramping up."
Source: Hilary Johnson, "More wealthy migrate south to avoid tax hikes; Specter of higher federal and state burdens hastens exodus from North," Investment News, August 8, 2010.
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