New Jersey
In the past, I've written about "wealth flight", a trend occurring in states that heavily tax their citizens. High net worth individuals are exiting states like Illinois, New York and Massachusetts to avoid the incredible burden of high property, income and estate taxes.
As Illinois considers yet another increase in income taxes, they might consider what's occurring in New Jersey.
Last week I visited with a CPA from New Jersey, who handles a broad range of clients.
The property taxes in New Jersey are incredibly high.
For example, in Illinois, if your home is worth $250,000, you can expect to pay approximately $5,000 in property taxes.
In New Jersey, that same $250,000 house will cost approximately $14,000 in property taxes!
And, New Jersey has some of the highest tax rates in the country. In short...
For those making $75,000 - $500,000 - the tax rate is 6.37%
Over $500,000 - the tax rate is 8.97%
Ironically, the 8.97% tax was originally referred to as a "millionaires tax" as it was only applied to those making over $1,000,000 per year. But, a few years ago, the "millionaires tax" was expanded to anyone making more than $500,000. And the latest budget proposal will move it to $400,000. I doubt that it will stop there.
The CPA offered the example of one of his middle class clients. The husband had a blue collar manufacturing job, while the wife was a school teacher. In retirement, their combined pension benefits total nearly $90,000. Given the income and property tax rates in New Jersey, the couple quickly moved to Florida, where they enjoyed NO income taxes and property taxes of approximately $1,500 per year.
The concept of "Wealth Flight" is now a distant memory in New Jersey, as the middle class are now following close behind.
As the CPA related, "New Jersey's state motto is now 'A great place to work - Horrible place to live'."
As Illinois considers yet another increase in income taxes, they might consider what's occurring in New Jersey.
Last week I visited with a CPA from New Jersey, who handles a broad range of clients.
The property taxes in New Jersey are incredibly high.
For example, in Illinois, if your home is worth $250,000, you can expect to pay approximately $5,000 in property taxes.
In New Jersey, that same $250,000 house will cost approximately $14,000 in property taxes!
And, New Jersey has some of the highest tax rates in the country. In short...
For those making $75,000 - $500,000 - the tax rate is 6.37%
Over $500,000 - the tax rate is 8.97%
Ironically, the 8.97% tax was originally referred to as a "millionaires tax" as it was only applied to those making over $1,000,000 per year. But, a few years ago, the "millionaires tax" was expanded to anyone making more than $500,000. And the latest budget proposal will move it to $400,000. I doubt that it will stop there.
The CPA offered the example of one of his middle class clients. The husband had a blue collar manufacturing job, while the wife was a school teacher. In retirement, their combined pension benefits total nearly $90,000. Given the income and property tax rates in New Jersey, the couple quickly moved to Florida, where they enjoyed NO income taxes and property taxes of approximately $1,500 per year.
The concept of "Wealth Flight" is now a distant memory in New Jersey, as the middle class are now following close behind.
As the CPA related, "New Jersey's state motto is now 'A great place to work - Horrible place to live'."
You mean EXITING not existing in the first paragraph of this article. You can see why people are leaving...the taxes are ridiculous.
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Thanks Karen, I caught the error and made the corection. Thank you.
As for the taxes, I hope the legislators look to the recent California results where all tax increases were OVERWHELMINGLY voted down. I think people are fed up. At least I hope so.
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