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Friday, October 30, 2009

The Wealthy Leave New York Over Taxes

The Rich Say 'Enough Is Enough' and it is about time.

I have stated on this blog multiple times that those that keep encouraging politicians to continue to raise taxes on the rich, who already pay the majority of all taxes and employ people, offer them health insurance, hell, fund almost everything with the taxes they pay, will soon drive those very people away, and it looks like the wealthy have finally had enough.

"More than 1.5 million state residents left for other parts of the United States from 2000 to 2008."

Let me go back to an article from September, titled "Risky Business: New York Taxes the Rich at Some Peril."

This year, the deep pockets of New York's rich were tapped like never before. The state's wealthiest pay new higher income tax rates, higher taxes for limousines and yachts, more to enter a horse in a race and more to dabble in real estate.

Meanwhile, many are losing millions from the closing of business tax loopholes and those making over $1 million are losing tax deductions others get.

Now, early revenue figures suggest that taxing the wealthy more under this year's state budget may have driven away richer New Yorkers. That could make the economic comeback for the state even harder.

``You heard the mantra, 'Tax the rich, tax the rich,''' Paterson said Wednesday at a gathering of newspaper editors at an Associated Press event in Syracuse. ``We've done that. We've probably lost jobs and driven people out of the state.''

``People aren't wedded to a geographic place as they once were. It's a different world,'' New York Lt. Gov. Richard Ravitch said.

Ravitch said last year's surcharge on income taxes for the next three years won't likely meet budget expectations. He said Albany must look to politically difficult spending cuts, rather than more taxes, to meet a deepening shortfall that Paterson estimated Wednesday could reach $3 billion.

``I don't think they have any choice,'' Ravitch said. ``In my personal opinion, we're at the outer limits of the elasticity of our tax system.''

For some, it's already snapped.

Buffalo Sabres owner Tom Golisano, the Paychex founder and billionaire who was paying $13,000 a day in New York income taxes, and media mogul Rush Limbaugh became ex-New Yorkers this year. Developer and New York icon Donald Trump told Fox News in April that the higher tax rates were foolish, stupid and ``a total disaster for the state'' and have spurred several of his millionaire pals to talk about leaving.

Golisano, who created 5,000 jobs from his Rochester payroll processing company, bristled when politicians said he was bailing out on New York this spring.

``If anything, New York state has bailed out on us,'' said Golisano, a past independent candidate for governor.

Emphasis mine above.

Not only are states that continue to raise taxes on the wealthy losing that tax revenue, but they are losing jobs all because politicians continue to think the wealthy's bank accounts are their own private checkbooks to pay for any new program or pork projects the politicians decide.

Now let us jump forward to today where a newly published study from the Empire Center for New York State Policy shows that 1.5 million NY state residents have migrated out of NY from 2000 to 2008.

What's worse is that the families fleeing New York are being replaced by lower-income newcomers, who consequently pay less in taxes.

Overall, the ex-New Yorkers earn about 13 percent more than those who moved into the state, the study found.

And it should be no surprise that the city -- and Manhattan in particular -- suffered the biggest loss in terms of taxable income.

The average Manhattan taxpayer who left the state earned $93,264 a year. The average newcomer to Manhattan earned only $72,726.

That's a difference of $20,538, the highest for any county in the state. Staten Island was second, with a $20,066 difference.

It all adds up to staggering loss in taxable income. During 2006-2007, the "migration flow" out of New York to other states amounted to a loss of $4.3 billion.

New York is a good example of the wealthy saying "enough is enough", but it is not the only place that is losing folks.

Did you see the latest report where it shows that 1.5 million "rich" people moved out of New York State between 2000 and 2008? The same thing is happening here in California and I will shortly be joining this exodus.

After living in California for more than 25 years, it has now become apparent that this State is no longer a place to reside in the future for the "wealthy" people who refuse to be over-taxed by a state legislature out of control on spending.

What the politicians don't seem to realize is that people who are smart enough to become independently wealthy are smart enough to move to another state where income taxes are lower or don't exist.

Donald Trump warned of this in a phone interview with Neil Cavuto back in April... listen to it here.

Some choice quotes from Trump:

***"The fact is that the state of New York did something very, very foolish, and they passed a tax, an income tax, and increased it very substantially from what it was.

And I believe that's going to be a total disaster for the state."

***"You're talking about millions and millions of dollars for some people that really have other options, Neil. They can move to other states. You take a state like Florida, run by a governor, Charlie Crist, who is a terrific governor, and who is very, very cherishing of his no income tax.

So, you know, I make a lot of money outside of New York State, as an example. And I'm saying to myself, wait a minute. For the privilege of living in New York, I am supposed to pay tens of millions of dollars in extra taxes? It doesn't make sense.

So, you have a lot of people like that, that make money, and not necessarily — it is one thing if it's Trump Tower, where I make money in New York. Then it's — I don't think it's a very good tax anyway. But when I make money outside of the city or outside of the state, and I am supposed to be paying extra taxes because I happened to have a bed in New York, it does not make sense at all.

So, people will be leaving New York. And those are the people that pay a lot of the tax burden of this state."

More on that here.