The governors of New York and Florida got into a bit of a squabble a few months ago. Andrew Cuomo complained, in amusing fashion, that Florida was “stealing” residents away from his state. The larger complaint, of course -- Cuomo's actual concern -- was that billions of dollars are FLEEING his state.
To which newly installed Florida Gov. Ron DeSantis had a pithy retort: “I'm not stealing anybody -- you are driving people away."
Since that ludicrous declaration from New York’s leader, the evidence is coming in to show the problem may be even larger than Cuomo states -- and about to get worse. A new study issued by Lending Tree, the online loan marketplace that measures the migration of residents between states, shows Florida is the overwhelming choice for relocation, outpacing the other 49 of these United States.
More than mere retirement reasons, there is a growing number of wealthy citizens seeking the tax haven that the Sunshine State has become.
Florida not only tops the list of new destinations, it is the runaway leader. As measured by Lending Tree, the most recent year of study was 2016, and that year showed Florida enjoying a beneficial net increase of $17.7 billion in Adjusted Gross Income. The next states on the list -- Texas and South Carolina -- saw an increase of $2.25 billion. The windfall was so large here that the next 19 states on the list, combined, equaled the total of Florida.
In addition, the Foundation For Economic Freedom measured the state tax rates against those moving. Of the 25 highest-tax states, 24 of them had net out-migration in 2016. “One of the states that gained from migration was Florida, where 145 households moved in for every 100 that left,” said one spokesman.
Meanwhile, the state of New York seeks to impose more taxes, as it sees a persistent drop in revenue. The state is in debt, and watching as its wealthy residents and business owners -- the highest tax-payers -- flee. In this same study, Cuomo’s state experienced a loss of $8.8 billion. Florida, on the other hand, is flush. DeSantis noted the state currently boasts a $1.4 BILLION surplus.
Another example of this trend is being seen in the financial services sector. Many of these institutions have been running away from their traditional Northeast home base, escaping the mounting tax rates being imposed. In just the past three years, 70 financial service companies have relocated to the Palm Beach area, for instance, with still more working to come in. And this is all bound only to improve.
As these numbers are stark (and impressive, from our perspective), the fact that these are measured on 2016 IRS findings means that this result is only going to broaden. In the following years the Trump tax plan has made these high-tax states even less desirable. While federal rates were cut for most, one thing that made an impact was placing a ceiling on the amount of state and local taxes that could be deducted. This meant that people living in areas like New York and California -- some of which pay municipal income taxes as well as a state tax -- actually saw their tax burden increase.
This will surely lead to us finding even greater numbers of tax migrations taking place, and greater windfalls for the state. All of this is something to consider when you realize how close we came to seeing these incentives ripped away, had Andrew Gillum or one of the other fiscally unfriendly Democratic candidates been elected governor.
Brad Slager, a Fort Lauderdale freelance writer, wrote this story exclusively for Sunshine State News. He writes on politics and the industry and his stories appear in such publications as RedState and The Federalist.