The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.
It’s looking increasingly likely that we’ll see the GOP tax bill pass in the near future. Prepped for signing by the end of this year, the bill is sure to have sweeping effects on all taxpayers, especially those in high tax states.
Consider Dan White at Moody’s: Taxation Shift Spells Trouble for Underfunded States
‘(Eliminating the state and local tax deduction) could help on the margins to drive people from those states to lower tax states because their burdens are going to increase significantly,’ White said. ‘What’s more, it’s going to make it more difficult during the next recession for states to increase taxes without being burdensome to the underlying economy.’
Many of the Rich Will Pay Under New Tax Plan
If we take the example of a high-net-worth individual living in California and making $1 million a year, that person’s state taxes amount to $102,000. If that person owns a $1.5 million home, property taxes would be around $27,000. As the new plan eliminates mortgage interest deduction above $500,000, this person would lose the ability to deduct roughly $20,000 in interest expenses.
This post was published at FinancialSense on 12/05/2017.