Bloomberg has an interesting piece on blue states going after taxes of fleeing wealthy residents who move on to states with no or low-income taxes. This is nothing new, of course. They are desperate for the revenue and the Republican / Trump tax reform that put stricter limits on state deductions for federal income taxes may be accelerating the exodus.
The obvious takeaway, if the desire is to keep the blue state tax collectors off your back, it’s best to cut the cord. If not, states like New York and California will hunt you down and audit you. So don’t keep accounts, certain property, or work from that state even part of the time. It’s best to cut all ties.
From Bloomberg:
Officials in places such as California and New York don’t make it easy for the rich to say goodbye, with investigators who dig deep, forcing residents to prove they really have cut ties in favor of cheaper pastures.
The article goes on to profile some cases of residents who won and lost in their battle to flee high tax states. It may be true that some seem to merely pretend to be gone to lessen their tax burden. Clearly, these aren’t the rich liberal types who constantly demand we raise their taxes, or perhaps they were just virtue signaling?
As blue states become more starved for revenue perhaps they will contemplate exit taxes and fees before leaving their utopian paradise. I’m sure many of them see that as a better alternative than lowering taxes and cutting revenue to make their states more attractive to businesses and residents.
More importantly, I’m sure many residents in states with lower taxes also hope the wealthy fleers not only cut their physical ties to former blue states but also their ideological ties.
