New yorkers fleeing high taxes. Among the wealthy tri-state area set, there’s more buzz than ever about fleeing south to Florida, land of mild winters and, more importantly after last year’s federal tax overhaul, zero state personal income tax. Actual action ? Pretty scarce. The idea of new yorkers fleeing high taxes after the Trump Tax overhaul may make sense, but high earners are learning what tax experts have known for years: Tax collectors in states like New York make it really hard to leave.
Wealth managers and tax lawyers say many of their clients are staying put after hearing about the scrupulous records they would have to keep to show they’ve really uprooted their lives and severed ties with their former states-and that it’s not as easy as just spending a few more days a month in a Florida vacation house. New Yorkers fleeing high taxes makes sense, but the paperwork is quite burdensome.
“When people understand they have to change life circumstances, some people say: “Never mind, that’s too big a life change for us to do right now” said Timothy Noonan, a partner at law firm Hodgson Russ LLP, who’s based in Buffalo and Manhattan. It isn’t easy to measure, but one early indicator shows no evidence of a mass exodus. In the past 12 months through May, the number of net-change of address forms filed with the U.S. Postal Agency for people moving to Florida from New York, New Jersey and Connecticut has actually declined slightly from recent highs.
So the idea that new yorker’s are fleeing high taxes, as a result of the new tax laws, is not supported by the facts from the numbers of people actually moving. The main reason seems to be the onerous burden the extra paperwork puts on them, when they do decide to make the move. Overall, more than 10 percent of New Jersey residents will see a tax hike this year–in California, it’s 8.6 percent, while 8.3 percent of New Yorker’s will see higher taxes, according to a study from the tax Policy Center. It remains to be seen if new yorkers fleeing high taxes becomes a reality.