Steve Garmhausen offers advice in the latest Barron’s to readers who want to move away from states with high tax bills.
Are you fed up with high state and local taxes? Voting with your feet might not be as far-fetched as it sounds, says financial advisor Grant Rawdin.
Dozens of Rawdin’s wealthy clients have pulled the trigger over the years, moving from high-tax states like New York and California to low-tax ones like Florida and Nevada. “Almost all of the moves work out swimmingly,” says Rawdin, the founder and CEO of Wescott Financial Advisor Group in Philadelphia, which serves clients from around the country.
The spread between different states’ tax rates helps explain why few relocators regret their decision. An average New Yorker pays 14.7% of their personal income on state and local taxes, but can slash that percentage in half by moving to Florida, according to a 2018 study from the conservative Cato Institute.
And Rawdin points out that it isn’t just retirees playing the tax-arbitrage game. Each year about two of his mid-career clients, who are mobile because their businesses are largely online, decamp to tax-friendlier states.
More of Rawdin’s clients may make the exodus in the coming few years: Interest in doing so has perked up because of the 2017 federal tax overhaul, which capped the state and local tax deduction at $10,000 a year.
