Miami Woos New York Homebuyers Fleeing Over Tax Law

Wait, why would capital gains make less of a difference? New York does not have a separate capital gains tax -- it's taxed at the same rate as regular income. It makes zero difference to the article's analysis if your income comes from investments or ordinary income (in fact, I would think that the NY vs FL difference is probably even more tempting to someone with capital gains income even if the raw dollar amount is the same).

You've also mixed up your before and afters for NYC when you tried to copy from the chart (NYC became more expensive after the new law, Miami became less expensive). The difference before the new law was about 700k, and the difference after the new law is about 1.2m. As the article says, the difference between taxes in Miami and NYC has gotten $450,000/year worse with the new law, not $100,000 worse.

I think you're probably right about the overall impact being small, however.

There are many articles over the years reporting the hedge fund moves from NY/CY to Miami. So they are bringing their $10M jobs with them in that case.

If you’re wealthy enough to travel most of the year for businesss or pleasure, why wouldn’t you make your resident state Florida?

1. https://www.bloomberg.com/news/articles/2018-06-04/florida-n...

2. https://www.reuters.com/article/us-appaloosa-hedgefunds-miam...

An anecdote that I previously posted on another thread and will repeat here:

A couple months back, I flirted with moving from NYC to Las Vegas for tax reasons. I was shocked at the expense of luxury housing there, and construction costs were similarly high (I was quoted $450-$500/sqft, on par with NYC). My realtor explained to me that rich Californians were "stampeding" into Nevada and had increased the cost of all things high-end by 50-100%--basically in the span of a year! She was very bearish on the market.

It seems some measure of rich flight is playing out in California/Nevada; enough to transform segments of the housing market. It's not far-fetched to imagine the same with New York/Florida.

What the article misses is that it's most likely being sold as a tax dodging scheme. In other words, buy a house in Miami, claim FL residency, avoid all of these taxes but spend most of your time in NY.

I’m not sure if there’s much of a reason to become downright upset about the article.

As a Miami resident, it’s clear that Miami is extremely influenced by NY and NY’ers living there to begin with. So I’m not sure if this is really news. NY’ers essentially built up what is Miami now and there is a strong sphere of influence from NY in Miami.

Miami is basically a satellite economy of NY. The big thing that Miami doesn’t have is high paying jobs. And tech in Miami is virtually nonexistent.

But wealthy folks residing in Miami don’t really need to worry about landing a decent job in the first place.

I'm not sure I see any evidence the latter one happens in the forseeable future. Many high tax states hold top-performing cities which are struggling to handle massive incoming migration that has been happening a good 20 years.

The biggest gripe in my cost of living is by far housing. If I moved back to my home town in Florida, it would be so I can live near my parents and so I can afford a house . Not for taxes.

I suppose states without top cities, like Vermont, might run into problems. But even that is speculation - how many people actually uproot their lives just to save on state income tax?

No one in their right mind is moving from New York to Nevada. More likely, in fact much more likely, is that the double taxation policy that was carved out against high-tax-base states is corrected once Republican national losses continue to pile up.

One can only hope that democrats remember how important it was to harm high-output states when they regain power and provide equivalent justice to the loaner states.

>There’s two great reckonings coming to high tax States in the coming years.

Unfortunately all the people that pushed the policy that resulted in these states being high tax* will be able to move to gated communities, expensive suburbs and overpriced downtown apartments in other states. The people who will be left behind to be burnt will be all the poor people who can't escape the hell they didn't create.

Things tend to bounce between extremes so I wouldn't be surprised if in the next 50yr a few currently high tax states go bankrupt then extremely low tax low service then back to some middle ground.

*High tax isn't a problem by itself. The problem it that high tax states in the US don't turn around and deliver a proportionate amount of public good. A huge amount of the money disappears into an opaque, graft ridden black hole. If people actually got something proportionate in return (like they do in a few parts of Europe) taxes wouldn't be bad.

Demand for real estate plummets and prices drop. Sounds absolutely horrifying.

The high income earners all fly off to states like Nevada, where the population is low and chances to earn a high income are even lower. That's definitely going to happen. Meanwhile, America's megarich continue to settle and grow their wealth in California, New York, and Washington and upcoming rich folk continue to pop up in those states while the best employment opportunities for other people also tend to be in regions where people are, not where tax benefits happen to be the best. Nevada's advantage is less the taxes and more the rapidly growing population and low rents due to a lack of high income earners driving rent prices up.

The tech market is terrible. Miami is great socially but it’s not a city to grow your career IMO. I would much rather stay a little farther north - West Palm or Boca. Still, the job market sucks.

Mediocre, with some exceptions like medicine and law, you need to run your own company or work remotely to live very comfortably.

I live in Miami, and the tech scene here is...small, and there's not really a lot of potential for moving up/around.

There are some good employers with a startup mindset like Ultimate Software (payroll/HR software) who pay well, but, the pay is marginal for everyone else. ADT and Office Depot are in the Boca Raton area (great if you've got Hadoop skills or retail experience), but, I haven't heard that people are paid above the average around here.

I live in Downtown Miami (and work from home), so, I can't comment on commute:

yes, because NYC is so far inland that it doesn't have this problem.

It's the next underwater mortgage crisis.

In the UK instead you pay 'stamp duty', whichever you want to think of it is sort of like paying 10 years of property tax upfront.