State policymakers should use federal tax reform as an opportunity to rethink their state budgets to ensure that residents receive high-value services at minimum cost.
Will more people in higher-tax states move to lower-tax states under the new federal tax law? The next section looks at current migration trends to provide some clues.
A June Bloomberg story said: "Florida's long-running effort to lure Wall Street hotshots is gaining traction thanks to a provision in the federal tax law that hits residents of high-tax states. That's because Florida doesn't have a state income tax and its property taxes are relatively low, whereas the tri-state area has among the highest property taxes in the country. 'SALT has been the No. 1 theme when we speak with finance companies' about relocating or opening branch offices in Miami, said Nitin Motwani, a lead developer of a $2 billion skyscraper in Miami."
Retirees are often footloose, and they can consult sources such as Kiplinger's "10 Most Tax-Friendly States for Retirees, 2017" and SmartAsset's "Most Tax Friendly Places for Retirees." The latter is an interactive site with detailed tax information down to the county level, and it provides a "Retirement tax friendliness index" for each location.
On its website, AARP discusses "Which States Provide the Best Tax Breaks for Retirees?" The organization is a vigorous lobbyist for reducing state taxes on retirement income, and it informs its 38 million members about state tax differences.
A 2004 study by Jon Bakija and Joel Slemrod finds that "High state inheritance and estate taxes and sales taxes have statistically significant, but modest, negative impacts on the number of federal estate tax returns filed in a state." In 2001 and 2003 studies, Karen Smith Conway and Andrew Houtenville find that low income, property, and death taxes attract elderly migration.
What Should States Do? The passage of the 2017 federal tax law has heightened tax competition between the states.
https://www.cato.org/publications/tax-budget-bulletin/tax-reform-interstate-migration
Will more people in higher-tax states move to lower-tax states under the new federal tax law? The next section looks at current migration trends to provide some clues.
A June Bloomberg story said: "Florida's long-running effort to lure Wall Street hotshots is gaining traction thanks to a provision in the federal tax law that hits residents of high-tax states. That's because Florida doesn't have a state income tax and its property taxes are relatively low, whereas the tri-state area has among the highest property taxes in the country. 'SALT has been the No. 1 theme when we speak with finance companies' about relocating or opening branch offices in Miami, said Nitin Motwani, a lead developer of a $2 billion skyscraper in Miami."
Retirees are often footloose, and they can consult sources such as Kiplinger's "10 Most Tax-Friendly States for Retirees, 2017" and SmartAsset's "Most Tax Friendly Places for Retirees." The latter is an interactive site with detailed tax information down to the county level, and it provides a "Retirement tax friendliness index" for each location.
On its website, AARP discusses "Which States Provide the Best Tax Breaks for Retirees?" The organization is a vigorous lobbyist for reducing state taxes on retirement income, and it informs its 38 million members about state tax differences.
A 2004 study by Jon Bakija and Joel Slemrod finds that "High state inheritance and estate taxes and sales taxes have statistically significant, but modest, negative impacts on the number of federal estate tax returns filed in a state." In 2001 and 2003 studies, Karen Smith Conway and Andrew Houtenville find that low income, property, and death taxes attract elderly migration.
What Should States Do? The passage of the 2017 federal tax law has heightened tax competition between the states.
https://www.cato.org/publications/tax-budget-bulletin/tax-reform-interstate-migration
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