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The Great American Tax Migration
- chrsw 4y agoThis tax migration doesn't appear to be abating the skyrocketing real estate prices and cost of living in NYC, San Francisco, Boston et al.
- intrasight 4y agoThose and and a select few other cities are still the best places to live in the US for young adults - as is reflected by real estate prices.
- spywaregorilla 4y agoMassachusetts has a flat tax rate of 5%
- jacobn 4y agoTangentially related: I wonder what will happen in SF/NYC when more of the office leases have expired and the corporate property tax base erodes? How will the cities fund themselves? Presumably by hiking residential tax rates and converting office space to residential, but the latter could take a long time…
- mistrial9 4y agothe last City and County of San Francisco budget I was aware of, was more than $1B for one year.. that is 'B' billion. And, good luck with your accounts receivable invoice for services rendered, small business.. more than one year to settle on a contracted service worth about $600k at the time, with no disputes. first hand story do not hold your breathe waiting for SF/NY to run out of money somehow
- mistersquid 4y ago> I wonder what will happen in SF/NYC when more of the office leases have expired and the corporate property tax base erodes? Large metropolises will manage potential budget shortfalls how they will. More importantly, after large commercial leases expire, commercial property owners and their management companies will adjust their commercial rents until companies and institutions find value. While some concerns go remote-only, others will implement hybrid or even full RTO. The price and associated tax revenue on these commercial leases will stabilize and, more than likely, increase as the economy increases. The expiration of corporate leases will not usher municipal financial apocalypse as many observers seem to speculate. Rental market corrections unavoidably will lag pandemic economic contraction (leases take time to expire) and such contractions hardly signal the end of commercial and corporate interests in renting urban real estate.
- diogenescynic 4y agoYour comment is entirely wrong (and flippant). Basically every assumption you made is actually the opposite.
- freebee87 4y ago"Thus, in New York, the median employee in the stock market sector who earns $440,000, according to the State Auditor’s Office" As someone who works in this sector, this does not look True. An investment Banking VP with 10+ years experience at a bulge bracket probably brings in this much in income however this is not the median worker. There is a huge workforce of admins, Ops, legal, IT that work in the sector and bring it down. Also there is a large amount of burnout/turnover/layoffs in these jobs so that in any given year someone is not getting their full bonus.
- jonahbenton 4y ago
- bitshiftfaced 4y agoWhat?
- PopAlongKid 4y agoThis article is pretty vague, and in fact down right sloppy when it comes to making numeric comparisons. It casually mixes up taxable income with gross income, which are two significantly different things (tax rates only apply to taxable income). Then it talks about population losses from cities, without taking into account those who remained in the same state, or losses due to coronavirus fatalities. It casually tosses out claims like "New York, where the cost of living is exorbitant" yet nowhere does the article compare cost of living in New York state vs other states, since the article is actually about taxes. There's more, but I'll leave with this contra-article. California is indeed a high tax state for the very high income people, but it's actually very reasonable for middle and lower class income earners. "Yes, Texans actually pay more in taxes than Californians do" https://www.sfgate.com/news/houston-texas/article/texans-pay-more-taxes-than-californians-17400644.php https://www.sfgate.com/news/houston-texas/article/texans-pay...
- hn_throwaway_99 4y agoExactly. You can't compare taxes across states if you're only including income taxes but excluding property taxes. Texas property taxes are ~2.5% for me (and they adjust annually), while CA property taxes are (famously) capped at 1% of the purchase price.
- bombcar 4y agoAdjusted for current values two properties in different states often end up paying similar amounts of tax. It’s just part of the entire picture.
- mrep 4y agoDon't know why you are being downvoted. CA: $788,679 [0] * 0.73% [1] = $5757.3567 TX: $315,235 [2] * 1.69% [3] = $5327.4715. [0]: https://www.zillow.com/ca/home-values/ https://www.zillow.com/ca/home-values/ [1]: https://smartasset.com/taxes/california-property-tax-calculator#:~:text=The%20average%20effective%20property%20tax,%2C%20which%20sits%20at%201.07%25 https://smartasset.com/taxes/california-property-tax-calcula.... [2]: https://www.zillow.com/tx/home-values/ https://www.zillow.com/tx/home-values/ [3]: https://smartasset.com/taxes/texas-property-tax-calculator#:~:text=Texas%20Property%20Taxes,-Photo%20credit%3A%20%C2%A9&text=Property%20taxes%20in%20Texas%20are,Lone%20Star%20State%20is%201.69%25 https://smartasset.com/taxes/texas-property-tax-calculator#:....
- Aunche 4y ago> The population hemorrhage is impressive: between July 2020 and July 2021, New York lost more than 300,000 people Maybe because that was the height of the pandemic and the city was shut down? Judging by the astronomical rent increases, even more people moved back.
- sbate1987 4y ago
- unity1001 4y agoNon-objective arguments. The regions that the people are moving away from seem to be high cost of living regions. The regions that they are moving to seem to be low cost of living regions. Tax does not seem relevant there.
- throwaway0a5e 4y agoTax is just one part of the cost of living picture. A couple percent state income tax difference isn't really a big deal with the feds take a much bigger cut but when you consider the long tail of $6 gas, sin taxes on your smokes, tax on prepared food, government fees, etc, taxes can add up to a noteworthy fraction of said picture.
- stevenicr 4y agoAfter speaking with many people in and around real estate in TN,it seems that a move to Nashville from CA / Chicago, NY, etc. could save quite a lot in taxes. Yes the cost of living is lower, yes you can get a house with yard for the price of an apartment, food is cheaper, etc.. However for many leaving there for here, eliminating state income tax, and especially with SALT tax thing that changed some years ago ( https://taxfoundation.org/tax-basics/salt-deduction/ https://taxfoundation.org/tax-basics/salt-deduction/ ), they seem to save $30,000 in taxes (?) or so on average I think the numbers have been. If you have fancy cars / boats etc that are subject to personal property tax per year you may find saving thousands there as well. Certainly this is not the same for $10 / hour fast food workers or billionaires with fancy tax vehicles. Granted, services and things are different - so no way to make it not apples to oranges - but tax is indeed relevant to a set of people that consider ~30k / year to be a big deal.
- tolmasky 4y ago> "Republicans felt that residents of the least socially protective states should not indirectly fund the welfare state and the spending implemented by Democrats in the coastal states." Perhaps they "felt" that way, but the reality is that tax money generally flows from these coastal states to the red states. If anything, one could argue that SALT was a tool to help balance that out.
- xyzzyz 4y agoDo you have some data on how much tax money actually flows from coastal states to red states?
- wahern 4y agoThis data comes from the Rockefeller Institute of Government's semi-annual Balance of Payments studies, which they've been doing for some years. See, e.g., https://rockinst.org/issue-area/balance-of-payments-2022/ https://rockinst.org/issue-area/balance-of-payments-2022/ (reflects COVID) and https://rockinst.org/issue-area/balance-of-payments-2020/ https://rockinst.org/issue-area/balance-of-payments-2020/ (pre-COVID). A typical summation in the news media looks like this article, https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-more-than-their-fair-share-here-are-the-receipts-column/ https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-... A typical rebuttal looks like this article, https://thehill.com/opinion/finance/502321-no-blue-states-do-not-bailout-red-states/ https://thehill.com/opinion/finance/502321-no-blue-states-do... IMO, it rings hollow, except for the accusation of liberals being glib. From a macro perspective this state of affairs seems to challenge both conservative and liberal beliefs about the effects of government taxation and expenditures.
- TMWNN 4y agoI've cited the Rockefeller Institute's data elsewhere in this discussion, so am glad that someone else is aware of it. >A typical summation in the news media looks like this article, https://www.tampabay.com/opinion/2022/01/22/blue-states-pay- https://www.tampabay.com/opinion/2022/01/22/blue-states-pay-... Ugh, what an awful article. The author, putatively a Floridian, conveniently twists the data to support his thesis: * He calls Florida a "Republican state". It's about as swingiest a swing state can be right now, and has been such for decades. * He calls Virginia another "Republican state", I presume because it has a Republican governor. It also has voted for Democratic presidential candidates going back some years. It's also a swing state, but certainly less so than Florida is. * Worst of all, he cuts off the data to obscure the important point of the Rockefeller data, which is that (as I wrote elsewhere) it's not so much "blue states", but NY/NJ/CT/MA that subsidize the rest of the country. They played the same role a century ago when MA was about as safe a Republican state as any in the country while NY was with OH the most important swing state.
- papito 4y agoThe author's tagline is "In Bitcoin We Trust". This is all I need to know. Typical "toxic libertarian" drivel. No taxes, no rules, no laws, everyone for themselves. I've read many an article in the last two years about the imminent demise of Blue states and NYC, but the reality is that Manhattan average rent just hit $5K a month: https://www.curbed.com/2022/07/manhattan-rent-historic-high-bad.html https://www.curbed.com/2022/07/manhattan-rent-historic-high-... You want to guess why? Because people are willing to pay premium to live in a civilization, among people who value education, science, and progress, and where I don't have to go shopping at Target with some gun nutjob exercising his "god-given" right to carry a cannon everywhere. No thank you - I'd rather pay higher taxes. Enjoy your Wild West.
- blantonl 4y agoPeople also earn a premium to live in a civilization, among people who value education, science, and progress.
- exabrial 4y agoTaxes are the problem. The are the root cause of every racial and societal equality in the USA (Well that, and neighborhood associations and their racist beginnings).
- illuminerdy 4y agoI think trying to limit it to taxes ignores the many other reasons why average Americans are fleeing states like California and New York. Business climate, high crime, low prosecution, homeless issues, etc.
- Kon-Peki 4y agoThis focuses on income tax only. That's a terrible way to look at things. What about property tax? Home prices? Car insurance? House insurance? WAGES? Etc. I looked at moving from Illinois to Florida last year and decided against it. I couldn't afford it. No state income taxes are a trap! EDIT - I should probably mention that I cannot think of a possible justification for living in Florida if you aren't within 5-10 miles of the ocean, and that definitely affects the cost of everything. Growing up, I had relatives that lived along a river in northern Alabama, and it was an amazing, fun place to be. Boating, hiking, biking, swimming, etc. Rock outcroppings so you could jump 20 feet down into the water. The interior of Florida has nothing comparable to offer.
- xyzzyz 4y agoYou literally cannot imagine that someone might not care that much about outdoors? And you’re posting on a site mostly frequented by computer people? That’s pretty closed minded.
- Kon-Peki 4y agoFair enough. But then again, shouldn't Orlando be filled with computer people and Silicon Valley with outdoorsmen?
- deleted 4y ago[deleted]
- gameman144 4y agoIf we were to allocate all the people in the world from scratch, maybe. In the real world, history matters too, though.
- rmk 4y agoThe writer makes a pretty big mistake assuming that upon moving from NY to FL, a person can keep earning the same income as he did in NY. This is the exception, not the norm. The norm is for people to get a paycut because of the (weaker) market in FL, and pretty significant ones at that, easily amounting to 15+ percentage points. This is true for software, but I do not know if it's the same for other occupations. I do have a healthy suspicion that it's true and perhaps more drastically so for other occupations, in which case the author's mistake is magnified in the general case. If you combine that fact with the fact that some expenses such as schooling and online shopping are actually quite uniform across the nation (private schools seem to cost around the same whether you are in the Bay Area or elsewhere, and public schools are free across the nation; ditto for Amazon/other online shopping which I assume comprises a healthy chunk of people's spending nowadays), the only savings come from housing (able to own a house vs not at all in CA and NY) and grocery (is gas much cheaper in the NY vs FL case? It certainly is in the CA vs FL case). Most people's retirement portfolios comprise ETFs and such that pay out the same whether you are in CA or FL, so I suppose people get more bang for their retirement buck by moving out of CA/NY, but that has been true even before the pandemic. So the picture is more complicated, and I do not believe people can expect to get 2 months earnings back in their pockets by moving cross-country. Any counterarguments to this line of reasoning?
- addicted 4y agoThe migration data compares July 2021 to early 2020. A lot of that out migration has reversed at this point (in fact, more than reversed), as people realize that super hot weather might be nice in certain days of the year, but it really sucks during the rest, bad schools are still bad, bugs suck, and there was a reason they weren’t living in flung out car first suburbs in the first place.