I Find This To Be A Little Dumb

The NY Post tells us that high earners are fleeing New York and being replaced, and the headline says it is all about taxes:

Tax refugees staging escape from New York

New Yorkers are fleeing the state and city in alarming numbers -- and costing a fortune in lost tax dollars, a new study shows.

...

What's worse is that the families fleeing New York are being replaced by lower-income newcomers, who consequently pay less in taxes.

Overall, the ex-New Yorkers earn about 13 percent more than those who moved into the state, the study found.

...

Why all the moving vans?

The center, part of the conservative Manhattan Institute, blames the state's high cost of living and high taxes.

Well.  In another version, young people move to New York, get their first job, get married, and move to the suburbs to raise their kids.  The youngsters moving in earn less than the family guys and gals moving out (or retiring to Florida).  Sooo boring and conventional.

The study offers modest support for that notion from IRS data:

Taxpayer households leaving the state were larger, averaging 1.81 people compared to 1.58 for those entering the state.

New York state and city taxes are crazy, but the housing and school costs are what send many new familes packing.  At a guess.

Comments

[Porchlight]

Could it be that larger numbers of childless higher-income people are now leaving? Would be interesting to see the IRS data on the average size of households leaving NY, say, 5 years ago.

[spongeworthy]

For me the capper was $400 a month to park a car. The taxes are no better here in NJ, but the schools definitely are so there's that. But $400!

[Jack is Back!]

I think it is overall tax policy and other political issues that affect companies, business, employment and retirement. I believe New York is a high level tax state and with a poor overall business climate. What the study should be looking at and tracking is the number of businesses that have relocated or closed shop and how many employees were affected and what their lost tax revenue both corporate, personal and property resulted. Not so crazy. My company was HQ in California but it finally dislocated most of its business lines into lower cost regions. Ipso facto - California lost not only individual tax revenue but also property tax revenue since those thousands of people who left owned homes not rented them. This a bigger snowball than it appears.

[jean]

Did all the companies move back to the Wall Street area after 9/11?If they moved part of their operations to NJ wouldn't that be another reason to move out of NY?

[narciso]

I think Ace Greenberg, is getting the last laugh, in the LUN

[Old Lurker]

JiB & Jean...a number of firms realized that concentrating many back office and sensitive data jobs near ground zero was not only expensive, but foolish should it happen again. So many many jobs were scattered to the winds, NJ included, and will not be returning. Some firms that had huge leased spaces now have much smaller requirements so that they maintain their presence on the Street...but not with all those people and expenses.

[Greg Toombs]

"New York state and city taxes are crazy, but the housing and school costs are what send many new familes packing."

All of the above.

[Greg Toombs]

BTW, Rutgers econ professors published a study showing similar net population outflow from New Jersey to parts unknown from 2000-2007, also lowering tax receipts. Can't put my finger on it at the moment.

New Jersey's unfortunate standing as the state with the highest total tax burden was fingered as the cause.

[jimmyk]

What the study should be looking at and tracking is the number of businesses that have relocated or closed shop

These are probably measured in long-run population trends. New York has lost population over the last twenty years relative to the lower-taxed south and west. (I realize this doesn't quite explain California--other things matter too.) These shifts take decades.

California lost not only individual tax revenue but also property tax revenue since those thousands of people who left owned homes not rented them.

This can't be right. Rental properties still pay property tax. People who move out of homes don't destroy them when they leave.

[Rick Ballard]

A brief moment of silence should be observed for the collapse of the toxic debt industry. The salaries, commissions and bonuses which vanished upon its demise are no longer available to swell the tax collectors coffers. Even worse, Uncle Ben is no longer gobbling up bonds as part of his monetization quantitive easing strategy - and that's not going to help fill the ravenous max of the tax collectors in the Bluest of Hells either.

Romer is already floating ballons re a national VAT - maybe Nanny Bloomy should get out in front of that parade?

[steve sturm]

"New York state and city taxes are crazy, but the housing and school costs are what send many new familes packing."

Perhaps if taxes weren't so high, the housing and school costs wouldn't drive new families packing.

[Old Lurker]

JimmyK, he's not completely wrong on that. Landlords do have to pay the RE Taxes, but baswed on the value of their holdings. If house values fall because everybody is leaving, taxes fall accordingly. In commercial RE, if a high paying tenant is replaced with a lesser tenant - or nobody - the landlord will appeal, and win, the old assessment because the old value is no longer the current value, and RE taxes fall. Landlord's jump right on the commercial revaluations because the tax savings are huge.

[Old Lurker]

"baswed"? So much for proofing.

[Charlie (Colorado)]

I'd be curious what percentage of the loss in tax is accounted for simply by Rush Limbaugh doing his Lot from Sodom homage?

[Greybeard]

Lurker said,
"So many many jobs were scattered to the winds, NJ included, and will not be returning."
I'm worried about Washington, D.C. for the same reason...
Easy access along the coast, and one good-sized device could literally do away with all three branches.
Nebraska, South Dakota, and Iowa need jobs!

[Ted]

Don't forget their infamous rent controlled properties, where the property owner gets repeatedly socked with higher taxes but can't recoup by raising rents accordingly.

[Jack is Back!]

jimmyk,

You're right. I didn't mean to mention property tax revenue shortfalls. Just suffered a brain fart when I was writing.

Something that no one is talking about in this economy is the unequal leveling off of property tax revenues while homes, condos, land and commercial have all lost a lot more of their value than the tax based appraised values show. You are still paying basically the same taxes on a home with its pre-2008 or 2007 values. Here in Florida they just adjust the millage.

If anyone knows where the property tax has fallen equal to the "new" adjusted value of their home due to the market realities, I'd like to know.

[patch]

But we have Broadway, museums, expensive restaurants, stupid politicians...

Why would anyone want to leave????

[Gregory Koster]

Jack, we have that adjust-the-millage feature here in Washington state, but it's finally ground to a halt. An initiative caps the amount the millage can rise, and about six months ago, the junior taxing districts and schools began ramming into that limit. Result: a lot of pain in local government, which is bawling for a bailout from the state. Desipte being almost as blue as CA or MA, WA state is snarling back at the locals, trying to persuade the locals to join the state's effort to get the Feds to bail them out.

[daddy]

Wonder if anybody could make money by slightly changing that "I heart NY" T-Shirt slogan and using the International "Don't or No symbol" like on Ghostbusters, and turning it into "I Don't Heart NY Taxes."

Simple and stupid sure, but I'd wear one to a Yanker's game.