Experts say it is just starting. The cap on state and local tax deductions (SALT) has already begun to drive residents away from high tax states like NY, NJ and CA.
“It took a few months for taxpayers to realize the dollar implications – until they actually filed their tax returns this year,” Alan Goldenberg, a principal at Friedman LLP. “It quantified the impact of the loss of the SALT deduction when people saw it in front of their eyes on their tax return.”
The states these people are leaving to are Florida, Texas, and Nevada. All these do not have individual income tax. Some businesses are also looking to move.
New York has taken retaliatory responses towards those leaving, as they are loosing billions in tax revenue. If you leave NY and you are fairly wealthy, beware.
NY had the 3rd largest outflow of any state with 452,000 people leaving last year. CA had the largest outflow.
As it turns out, this has been happening for quite a while. The following 2005-2014 graph depicts it. It has just intensified in within the last few years.