Why Millionaires are Bolting From New Jersey (Like Everyone Else)
So long and thanks for everything!
New data from the financial research firm Wealth-X finds more than 5,700 millionaires packed their bags and left the New Jersey-New York City area over the past year.
According James Hughes, a Rutgers University economist, this is not surprising at all because U.S. Census data tells us New Jersey is losing at least a thousand people a week — a net number of the total number of individuals moving out vs. the number of new state residents — and this group includes a significant number of high-wage earners
“These are the people that pay the great share of our income taxes and the like, so losing them is certainly not helpful to the state," Hughes said.
So why are these people packing up and leaving?
“We all know how high our tax rates are. We know have — we used to call it the millionaire tax. Now it’s the $5-millionaire tax, so it’s high taxes," Bolton said. And also we have the new federal legislation which limits state and local tax deductions on your income tax return.”
Hughes noted at the same time, the governors of New Jersey and New York are now saying more taxes are needed from the wealthy in order to support all of the goals of both states, and “some of those high wealthy people, seeing what’s on the horizon in terms of even more tax increases, they may well be retreating to more friendly destinations.”
He said if high wage earners vacate the Garden State, "it certainly inhibits growth in the state’s income tax, which is the largest tax source to support state government.”
Hughes said the top 1 percent of wage earners in New Jersey pay between 75 and 80 percent of the income taxes that are collected, so if there’s a significant exodus, that will make balancing the state budget that much more difficult.
He added another negative impact of wealthy individuals leaving New Jersey is the businesses they run or own will sometimes either move with them or downsize, which means a loss of jobs.