‘Diabolical’: Gov Cuomo and blue state Dems blame Trump as citizens flee for low-tax red states

Chris White, DCNF

New York Gov. Andrew Cuomo and other public officials from blue states are blaming President Donald Trump’s tax overhaul for people moving to Texas and Florida where the tax burden is less burdensome.

The Democratic governor said Monday that changes to the federal tax law resulted in his state losing $2.3 billion in tax revenue. The 2017 law capping deduction for state and local taxes at $10,000 is the reason for the shortfall and immigration out of the state, he said at a press conference.

“That’s a $2.3 billion drop in revenues. That’s as serious as a heart attack. This is worse than we had anticipated,” Cuomo said. “I don’t believe raising taxes on the rich. That would be the worst thing to do. You would just expand the shortfall. God forbid if the rich leave.” He called the decision to cap deductions “a diabolical political maneuver” designed to help red states.

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Officials in other northeastern states are also blaming the tax bill for depleted tax revenues, The Wall Street Journal reported Monday. New Jersey reported a 35 percent drop in income-tax revenue for December 2018 compared with in 2017.

Connecticut officials made similar complaints. Trump’s tax reforms could drag down revenues later in the year, according to Connecticut’s Comptroller Kevin Lembo. States such as Florida and Texas have reaped the benefits as New Yorkers flee. The ease of working remotely and the tax burden are driving the mass migration.

Florida had the highest level of net migration from July 2017 to July 2018, while New York was the largest overall population loser, with Illinois bringing up the rear, WSJ reported. Florida also gained 231,000 jobs in 2018, a nearly 3 percent increase over the previous year. The sate’s unemployment rate fell to 3.3 percent in December.

“A lot of rich people are trying to find a way out of New York,” Barry Horowitz, an accountant who specializes in helping clients switch residency to lower-tax states, told reporters Monday. Horowitz receives a call a week from wealthy people looking to leave their state, a significant uptick from before the tax bill.

California has been hit especially hard over the years. The state’s high housing prices and rising gas prices are driving away what remains of the state’s low income citizens. Those migrating from the coastal state are making their way for places like Las Vegas and Arizona, where housing prices are relatively cheap compared to California.

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The Golden State saw a loss of over 138,000 people in that 12-month period, according to the data, while Texas experienced an uptick of more than 79,000 people. Arizona and Nevada, meanwhile, gained more than 63,000 and 38,000 residents, respectively. California’s extraordinarily high gas taxes is another reason for the mass exodus.

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