April 27, 2018
Conservative economists Arthur Laffer and Stephen Moore are predicting a new mass exodus of wealth from New York and California because of the new tax law. But academics who have studied taxes and migration call the forecast “pure nonsense.”
In an op-ed in the Wall Street Journal headlined “So Long, California. Sayonara, New York,” Laffer and Moore (who have both advised President Donald Trump) say the new tax bill will cause a net 800,000 people to move out of California and New York over the next three years.
The tax changes limit the deduction of state and local taxes to $10,000, so many high-earning taxpayers in high-tax states will actually face a tax increase under the new tax code.
Laffer and Moore say that the effective income-tax rate (what people actually pay) for high earners in California will jump from 8.5 percent to 13 percent. Wealthy Manhattanites would face a similar increase, they say. Those who make $10 million or more will see a potential tax hike of 50 percent or more, according to their analysis.
Those hikes, they say, will cause an exodus of residents to move to lower or no-income tax states.
This article was posted: Friday, April 27, 2018 at 4:41 am