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But high earners in places with hefty income taxes-not just California and New York, but also Minnesota and New Jersey-will bear more of the true cost of their state government. If you earn $10 million or more, your taxes might increase a whopping 50%.Ībout 90% of taxpayers are unaffected by the change. Similar figures hold if you live in Manhattan, once New York City’s income tax is factored in. The top tax rate that you actually pay just jumped from about 8.5% to 13%. Now that deduction for state and local taxes will be capped at $10,000 per family.Ĭonsider what this means if you’re a high-income earner in Silicon Valley or Hollywood.

In places like California, where the top income-tax rate exceeds 13%, that tax could be deducted on a federal return. The winners are likely to be states like Arizona, Nevada, Tennessee, Texas and Utah.įor years blue states have exported a third or more of their tax burden to residents of other states. The losers will be most of the Northeast, along with California.

But the Trump tax bill’s cap on the deduction for state and local taxes, or SALT, will accelerate the pace. This migration has been happening for years. In the years to come, millions of people, thousands of businesses, and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states. Jerry Brown called the bill “evil in the extreme” and fumed that it would “divide the hell out of us.” He’s right-but in the end, this change could be good for all the states. Sayonara, New York.Īs the Trump tax cut was being debated in December, California’s Gov. The Wall Street Journal reports blue states will lose millions of people in the years to come-and they aren’t ready. Tired of paying for everyone else’s retirement before mine,” said one respondent. But the government turned on us (property, income, sales, parking, red-light/speed cameras, bags, soda). “We could handle the cold, avoid the crime and pay the tax. In one year.Īsked why they were leaving people overwhelming said taxes or the illinois budget mess. In 2017, Illinois lost a net 33,703 residents, the largest numerical population decline of any state. A Chicago Tribune commentary says Hello, exodus deniers: No, it isn’t Illinois’ weather.įor four years in a row, Illinois has lost population in alarming numbers.

Golden dragon chinese restaurant carson city nv