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Wealthy and middle class fleeing from NY
New Yorkers are fleeing the state and city in alarming numbers -- and costing a fortune in lost tax dollars, a new study shows.
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The vast majority of the migrants, 1.1 million, were former residents of New York City -- meaning one out of seven city taxpayers moved out.
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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.
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Re: Wealthy and middle class fleeing from NY
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the ex-New Yorkers earn about 13 percent more than those who moved into the state
... which arguably means that they paid twice as much in income tax, and collected next to zero in gov't subsidies.
It will also be interesting to see the 2009 NY taxpayer migration numbers, since these will be the first to be directly affected by the recently increased state income tax rates, Obama's pay czar's capping of many Wall St. salaries / bonuses etc.
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Re: Wealthy and middle class fleeing from NY
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
AznExtasy
Where are they going?
If I remember right, the article mentioned NJ and FL.
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Re: Wealthy and middle class fleeing from NY
From 2000 to 2008, 1.5 million people left N.Y. State. 1.1 million of them left N.Y.C. Most left for the Sun Belt= Texas: Florida; Arizona; Nevada and both Carolinas. According to IRS stats analyzed by The Empire Center for New York Policy, they had 2006 and 2007 average annual gross incomes of $57,144. The new arrivals replacing them, at least in N.Y.C. make 13% LESS. The State has lost a total of $4.3 billion in tax revenue. Now most of that was lost Wall Street revenue but a major chunk was from folks voting with their feet.
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Re: Wealthy and middle class fleeing from NY
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average annual gross incomes of $57,144. The new arrivals replacing them, at least in N.Y.C. make 13% LESS
Keep in mind that this is a highly homogenized overall average, which does not show that some number of former residents had $250k+ per year incomes and thus fell in the highest federal, NY state and NY city income tax brackets. These are the former residents that moved to FL, TX and other states that do not have a state income tax.
Nor does it show that a significant number of new residents have incomes below $40k per year, thus essentially paying next to nothing in the way of income tax. Nor does it show that some number of new residents have incomes below $25k per year, which not only de-facto exempts them from paying income taxes but also makes them eligible to collect all sorts of gov't subsidies / social benefits at the expense of higher earning NY taxpayers. This partially explains why there has been a $4 billion a year swing in NY state's income tax revenues, but an even larger swing in overall state deficit spending (partially caused by increased gov't subsidy / social benefit cost).
Everything happens at the 'margin'.
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Re: Wealthy and middle class fleeing from NY
Over the same time period New Jersey has lost 150,000 Taxpayers. Not just residents, taxpayers. I've heard it claimed by Christie that half were making at least 100 k per year.
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Re: Wealthy and middle class fleeing from NY
if you stop and look at the 'avoided' taxes when moving from NY to FL or TX or NV or any other zero state income tax state, it's pretty persuasive ...
NY state income tax rates are 6.85% starting at $20k income, then gradually increasing to 8.97%. It should also be noted that for $550k income and up, a recapture tax causes the 8.97% to apply to every single dollar earned. Additionally, starting at $ 1 million income, practically no itemized tax deductions are permitted. At a 'typical' $80k income level, the state tax rate is 7.35%
NY City imposes an additional income tax which begins at 2.9% at $22k income level and tops out at 3.65%. So on the basis of these income taxes alone, former NYC residents stand to realize somewhere between a ~9% and ~12% de-facto 'pay raise' by earning an identical amount in a different state.
In addition to this savings, there are a number of other savings possible via the avoidance of sales taxes and 'stealth' taxes. NY sales tax rates are at least 8%. Additionally, there is an 8% 'stealth' tax on every electric bill / phone bill / cell bill etc. And there is the ever famous NY road tax on gasoline at 42.5 cents per gallon ! These taxes do not exist or are far lower in FL, TX, NV etc.
Then you can look at the comparative prices of other things that are subject to state mandates. For example, because of NY state mandates requiring that all NY health insurance must cover mental illness treatments, alcohol / substance abuse treatments etc., the minimum cost of health insurance in NY is 2-3 times higher than that of 'medical only' health insurance policies available in other states. Because of crime rates, NYC property insurance is similarly more expensive. And because of a 'plaintiff friendly' court system, liability insurance rates are similarly more expensive.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Melonie
Keep in mind that this is a highly homogenized overall average, which does not show that some number of former residents had $250k+ per year incomes and thus fell in the highest federal, NY state and NY city income tax brackets. These are the former residents that moved to FL, TX and other states that do not have a state income tax.
Nor does it show that a significant number of new residents have incomes below $40k per year, thus essentially paying next to nothing in the way of income tax. Nor does it show that some number of new residents have incomes below $25k per year, which not only de-facto exempts them from paying income taxes but also makes them eligible to collect all sorts of gov't subsidies / social benefits at the expense of higher earning NY taxpayers. This partially explains why there has been a $4 billion a year swing in NY state's income tax revenues, but an even larger swing in overall state deficit spending (partially caused by increased gov't subsidy / social benefit cost).
Everything happens at the 'margin'.
The article says 13 percent less, not 1,000 percent.
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Re: Wealthy and middle class fleeing from NY
I wouldn't be surprised if a large number of people leaving New York are retirees.
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Re: Wealthy and middle class fleeing from NY
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The article says 13 percent less, not 1,000 percent
the 13% applies to relative average income levels, the higher figure applies to relative actual tax revenues ( or tax burden if gov't subsidies received exceed taxes paid). As you are certainly aware, actual payment of state income tax dollars is progressive versus income, and also actual tax liability doesn't rise above zero until income exceeds exemptions plus deductions.
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I wouldn't be surprised if a large number of people leaving New York are retirees
undoubtedly retirees are leaving ... but not so much because of increasing state income taxes as increasing state property taxes ( which is a whole nuther subject) and increasing prices by NY merchants who must absorb their own tax increases / utility cost increases / labor cost increases. But arguably a far larger number of former NY residents who are leaving the state are 'professionals', who stand to benefit not only from reduced income tax rates but also benefit from better 'professional' job opportunities. There are also a fair number of 'uber-rich', who stand to benefit the most from the differential in personal / business income taxes.
has some specifics
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Re: Wealthy and middle class fleeing from NY
Professionals also make a lot more money working in New York City than they would in most other places.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
eagle2
Professionals also make a lot more money working in New York City than they would in most other places.
There may be a slight difference between revenue and profit there. :D
When I moved from California to Texas, I took an income hit, but ended up with more money in my pocket. I believe it to be somewhat the same for NY's moving to other parts of the country.
There comes a point where golden geese start laying lead eggs and it's time to move on.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
eagle2
Professionals also make a lot more money working in New York City than they would in most other places.
Yes but their costs of doing business are much higher and so is the overall cost of living. A good number work in NYC but live in the suburbs, especially N.J. and Connecticut.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Deogol
New Yorkers are fleeing the state and city in alarming numbers -- and costing a fortune in lost tax dollars, a new study shows.
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Another 172,000 city taxpayers ended up in New Jersey.
Noooooooo New Jersey is full; go to Costa Rica. :P
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Earl_the_Pearl
Noooooooo New Jersey is full; go to Costa Rica. :P
High speed trains? In and out of NYC in north, south, and west directions. Those would actually get used. Nobody willingly lives in Jersey LOL!
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
eagle2
Professionals also make a lot more money working in New York City than they would in most other places.
Excerpt from Melonie's post in the "California is leading the way" thread:
(snip)thus it would appear that California is now joining New York in attempting to promote the imposition of a new 'professional services' business income tax in addition to the state income tax. This is highly controversial since it arguably constitutes a 'double whammy' for those that provide 'professional services'. The comment didn't mention that the scope of 'professional services' being contemplated includes lap dances !(snip)
California and New York are both experiencing tax paying citizens that are not eligible for government subsidies fleeing in alarming numbers, and imposing a 'professional services' business income tax could arguably create an even greater incentive for more of those tax paying citizens to leave! Eight of the nine states that do not have a state income tax (excluding Alaska because of it's geographic location and climate) could experience a staggering population increase. (With New Hampshire being the first state to be overwhelmed because of it's proximity to New York).
This could arguably cause overcrowding, rising unemployment rates, and more people obtaining unemployment and other government subsidies in those state income tax free states. This could potentially give them California's economy over a few years, and an incentive for the lazy and unemployed to hang around longer than planned. My argument is that the people have the real incentive to leave New York and California will be the people who are actually "haves" versus "have nots". Why leave a state if there are monetary incentives for you to stay?! The people that would flood states like New Hampshire and Tennessee would be people who were in the middle and upper class income bracket, who did not qualify for government subsidies in their old states. However, an increase in educated individuals in one area when the country is facing high unemployment rates, and there is no real demand for an increase in services WILL cause some long-term residents to lose their jobs as a result of competition with the newcomers. Newcomers who cannot find work will qualify for unemployment benefits and government subsidies. People that get laid off will follow suit.
Where will these state governments get the money to support the increasing burden on the public support systems? Will they increase taxes on utilities and gasoline? Someone will have to give something up to meet the demands of these newcomers. California and New York will become a haven for those who would rather live off the system rather than apply themselves or struggle in their respective states. New Hampshire, Texas, South Dakota, and the other state income tax free states will become overcrowded with people who want to work and don't want to have an additional business income tax imposed. This can only lead to trouble.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Earl_the_Pearl
Noooooooo New Jersey is full; go to Costa Rica. :P
You aren't just whistling dixie.
Even with my very advantagous tax structure I've considered the ex-pat route in either CR or Belize.
Not that there aren't problems going that way as well.
The real problem for NY and NJ is that most of the people moving are middle-class.
Middle-class people foot the majority of taxes. Not only because of their actual physical numbers but they tend to be the people who reduce their overall tax overhead the least. The very well to do and rich have accountants who eek out ever nickle to be recoverd out of the tax code. The poor have the government do it for them. The middle-class tax payer trying to make sense of the tax code on their own or availing themselves of the local H&R Block isn't setting themselves up for the best tax footprint possible as a general rule. Thus they pay a higher per overall percentage of their income in taxes [ie the Warren Buffet comment about his paying less, by percentage, than his secretary].
The middle-class also tend to be the group that demand the least in the way of public services. So state and local government will find higher costs coming from having communities with strong middle-class presence being replaced by those that are simply have and have not. So they will experience higher costs at the same time their revenue income is shrinking. Never a good combination.
Another good reason to be thinking about being someplace else.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Golden_Rule
You aren't just whistling dixie.
Even with my very advantagous tax structure I've considered the ex-pat route in either CR or Belize.
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Re: Wealthy and middle class fleeing from NY
This is not news -- it is history.
It has been going on since the nineteen-seventies or earlier.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
threlayer
This is not news -- it is history.
It has been going on since the nineteen-seventies or earlier.
Actually in the 1960's NJ experienced a large increase in population [more than 1 million people]. Some magazine, I forget which, named it the best state to live in the US. Back then though the increase in population were middle-class people moving to NJ to take advantage of the relatively low [low for an area near two major cities, NYC & Phillie, anyway], its manufacturing based jobs and its burgeoning white collar employment migrating from NYC to take advantage of NJ's better business tax structure.
It still increases today but its increase is much more in the way of immigrants, both legal and illiegal.
Population Growth NJ 1960-2000
http://www.censusscope.org/us/s34/ch...pl_graph_1.gif
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Re: Wealthy and middle class fleeing from NY
The first issue of the "Best Places to Live in America" voted Syracuse NY as in the top two -- long after I had moved here. The magazine writers were forced to alter their weighting quickly after that. It did induce some people to move here. Wonder where they are now?
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Re: Wealthy and middle class fleeing from NY
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Even with my very advantagous tax structure I've considered the ex-pat route in either CR or Belize.
I'll buy you a Margarita when you get here LOL !!!
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The real problem for NY and NJ is that most of the people moving are middle-class.
Middle-class people foot the majority of taxes. Not only because of their actual physical numbers but they tend to be the people who reduce their overall tax overhead the least. The very well to do and rich have accountants who eek out ever nickle to be recoverd out of the tax code. The poor have the government do it for them. The middle-class tax payer trying to make sense of the tax code on their own or availing themselves of the local H&R Block isn't setting themselves up for the best tax footprint possible as a general rule. Thus they pay a higher per overall percentage of their income in taxes [ie the Warren Buffet comment about his paying less, by percentage, than his secretary].
The middle-class also tend to be the group that demand the least in the way of public services. So state and local government will find higher costs coming from having communities with strong middle-class presence being replaced by those that are simply have and have not. So they will experience higher costs at the same time their revenue income is shrinking. Never a good combination
This is already the documented case in many medium sized NY / NJ / CA cities.
You also didn't mention the probable 'next shoe to drop' i.e. local budget deficits falling heavily on police / fire dep'ts. A perceived reduction in the probability of arrest for theft / burglary / mugging, in combination with a rising demographic of 'poor' immigrants, is likely to have a major future impact on the 'middle class' residents of medium sized cities as well.
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Re: Wealthy and middle class fleeing from NY
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Originally Posted by
Melonie
You also didn't mention the probable 'next shoe to drop' i.e. local budget deficits falling heavily on police / fire dep'ts. A perceived reduction in the probability of arrest for theft / burglary / mugging, in combination with a rising demographic of 'poor' immigrants, is likely to have a major future impact on the 'middle class' residents of medium sized cities as well.
I live in the "Green Zone" of New Jersey. If I stay late at a pub and walk home after midnight I will be stopped and questioned. I show my papers and after a light pat down am usually given a ride home.