The Republican tax plan’s limiting of the federal deduction for state and local taxes, plus the high cost of living in the state, led to thousands of millionaires leaving the area in 2018, according to a research firm’s new report.
The report by the firm Wealth-X showed that more than 5,700 residents with liquid assets worth $1 million to $30 million left the New York-New Jersey population center last year, The Record reports.
While the late-year plunge in the stock market could have eliminated some of that wealth, experts said the change in the deduction regulations for state and local taxes, or SALT, has made the New York-New Jersey area very expensive to live in.
One financial adviser told The Record that she has been advising her wealthy clients to set up residency in other states. The adviser spoke of one client who would have to spend an additional $150,000 to remain in the state. Others with high income find they enjoy a better standard of living in other states than they do in New Jersey, the expert said.
But, as The Record notes, millionaires aren’t the only ones leaving New Jersey. Twice as many people left the state as moved in during 2018. That’s the largest migration level of any state and pushes the New Jersey population to levels not seen since 2013.
Critics have repeatedly slammed Gov. Phil Murphy for doing little to reduce the cost of living in the state or proposing a plan to ease taxes here.
Murphy, who raised taxes more than $1.4 billion in his first budget and also boosted the state’s gas tax again, has said he can’t rule out raising taxes again in 2019. He has also refused to continue some policies instituted by former Gov. Chris Christie aimed at controlling the rise of property taxes. Murphy claims residents are willing to pay even more in taxes if they feel they are getting their money’s worth in state services.
Quote of the Day: “These people are doing O.K. here. They’d be doing great anywhere else, and what I’m finding is those people are relocating. They are leaving New Jersey,” — Debra Taylor, of Taylor Financial Group in Franklin Lakes, on the large number of millionaires who have left the state.
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