While long a haven for retirement, Florida’s effort to lure Wall Street executives has gained traction thanks to a provision in the federal tax law passed by the Trump administration that hits residents of high-tax states by putting a lower cap on state and local tax deductions.
Florida is also one of seven states that collect no income tax. The others are Alaska, Nevada, South Dakota, Texas, Washington and Wyoming. While New Hampshire and Tennessee don’t have a state income tax, they do collect taxes on dividends and income from investments.
Billionaire hedge fund manager David Tepper, once ranked as New Jersey’s richest resident, moved his main address and the headquarters of Appaloosa Management LP to Florida a few years ago. Real estate mogul Barry Sternlicht told employees of Starwood Capital Group that the firm’s headquarters will shift from Greenwich, Connecticut, to Miami Beach by 2021.
Having surpassed New York’s population in 2014 to be the third largest in the nation, Florida continues to siphon off the wealthy.
The average gross incomes of people moving to Florida from 10 states and Washington, D.C. exceeded $100,000, with those from Connecticut averaging $253,000. That far outstripped those of Florida natives who migrated to the reciprocal states.
“Job growth, lower costs of living, state budgetary challenges and more temperate climates” are the driving factors behind migration, Michael Stoll, a professor at the University of California at Los Angeles, said in separate study by United Van Lines.
Business formation can benefit from positive migration, too. Many of the states with the biggest income inflows from migration also lead in new business creation including South Carolina, Florida and Tennessee.
This article was provided by Bloomberg News.