New York has become a veritable “roach motel” — easy to get in but nearly impossible to get out. That’s bad news for the thousands trying to flee the ever-more expensive and high-taxed state.
The latest New Yorker to flee is none other than the mother of the left’s progressive darling, Rep. Alexandria Ocasio-Cortez (D-N.Y.). Bianca Ocasio-Cortez (BOC) apparently does not see eye-to-eye with her daughter about the virtues (and high taxes) of socialism, at least when it knocks on her door.
BOC bailed on the state recently, explaining, “I was paying $10,000 a year in real estate taxes up north. I’m paying $600 a year in Florida. It’s stress-free down here.” That commonsense message may not yet have percolated through to AOC, who may wonder why her mom’s phone number now has a Florida area code.
BOC really needs to have a chat with her daughter about real life economics, like supply and demand, and how if you drive up the cost of something, like labor, you’ll drive down demand. Which is why arbitrarily raising the minimum wage, for instance, so often turns out to hurt the very workers it is meant to help.
It also explains how high taxes can drive people to move, and take their marbles with them.
BOC is but one of tens of thousands who have decamped from New York. The Empire State ranked first in the nation in population loss last year, as over 48,000 people said sayonara to the steady increase in Albany’s tax grab.
It is not the first year that New York, which also ranks among the top 10 highest-taxed states in the union, has seen an exodus of residents, especially among the wealthy.
BOC is not a high earner, but many others moving out of the state are those paying not only high real estate taxes, but also high state income taxes, which are no longer totally deductible under the new tax law passed in 2017.
Those moving to Florida are also fleeing New York’s estate tax, which allows the state to grab 16 percent on estates valued at more than $5.5 million. Florida has zero income taxes and no estate tax. For millionaires and billionaires it is a good place to live … and die.
The 42nd “National Movers Study” conducted by United Van Lines reported earlier this year that of the folks departing New York, more than 41 percent earned over $150,000 per year, while only 8 percent had incomes below $50,000.
Since the top 1 percent of earners in New York pay 46 percent of all income taxes, the exodus of deep-pocketed residents is a serious threat to the state’s already shaky fiscal outlook.
It’s not easy to escape. Talk to wealthy people about leaving the state, and you’ll find there is a thriving cottage industry of lawyers and tax accountants advising on how to elude the grip of New York tax collectors.
The city and the state are becoming ever-more aggressive in demanding proof of residency. If you keep a house in New York, a long-forgotten Social Security box or have a doctor you see once a year, you may well find your claim to Florida residency challenged.
CNBC recently reported that New York conducted roughly 3,000 “non-residency” audits annually between 2010 and 2017, yielding a haul of about $1 billion from taxpayers who failed to prove their case.
Investigators for the state, according to the report, review cell phone records, dentist records and have even been known to check out refrigerator contents to see whether someone is actually living where they say they are. Nearly everyone leaving New York for Florida can expect an audit, according to CNBC.
It’s no wonder the state is so aggressive. Gov. Andrew Cuomo (D-N.Y.) recently announced a $2.3 billion revenue shortfall for December and January. Last year, as revenues began to sink, he blamed the weather. Now he says the new limits on (state and local tax) SALT deductions are responsible for the state’s fiscal woes.
Cuomo fails to take any responsibility for a steadily rising budget, which incorporates ever-greater benefits for people in the country illegally, higher pay for public employee unions, free college tuition and a cornucopia of other goodies handed out by legislators but paid for by a dwindling number of taxpayers.
At some point, the public balks.
New York has also persistently made it more expensive to do business in the state, demanding higher minimum wages and expensive benefits such as parental leave.
The hostility toward employers, personified by AOC, who helped drive Amazon to abandon its plans for a second headquarters based in NYC, is dangerous.
Not only does the state need to attract businesses to create jobs and opportunities for residents, but it also needs the taxes generated by firms, or the burden on individuals will only escalate.
Meanwhile, progressive politicians like AOC ignore these realities and are proposing ever-more costly national programs like Medicare for All and the Green New Deal. They ignore reality and common sense. Just as residents of New York can pull up stakes, so can wealthy individuals choose which country they want to live in.
AOC earned a degree in economics from Boston University. Maybe instead of swallowing whole the kind of leftist theory taught on college campuses today, she should have that heart-to-heart with her mom. She might actually learn something useful.
Published on The Hill