One blue state in New England is bleeding residents. As you can probably guess, it has mostly to do with tax policy. Why should people pay more to live in one state when they can easily move to another where the cost of living is lower?
Zero Hedge reports:
Rich People Are Fleeing Connecticut
Lawmakers like Connecticut’s Democratic Gov. Dannel Malloy should pay attention to the latest batch of IRS data, which show tax payers – particularly wealthy ones – are leaving Connecticut for states like Florida, where there is no income tax, and New York City, where taxes are high but at least you can order Chinese food at 4 am.
Indeed, as the Hartford Courant points out in an editorial, the latest data reveal that Connecticut is in the middle of a taxpayer exodus.
Those who moved out of Connecticut from 2015 to 2016 took with them more than $6 billion in adjusted gross income, or AGI.
People who moved to Connecticut brought with them only about $3.36 billion in AGI. The total net loss to Connecticut: $2.7 billion. In one year. That was in the top five of all states, regardless of population.
And that was before this year’s budget battle, which nearly precipitated dramatic cuts to municipal services. The taxes and cutbacks that lawmakers agreed to in order to pass a compromise budget bill will likely anger more monied nutmeggers.
Connecticut collected $6.85 billion in income tax from the 2015 tax year, or 4.3% of the $161 billion in AGI reported from all filers. If that same ratio held true in 2016, then the loss of $2.7 billion in AGI would have meant an actual loss of more than $100 million in income tax revenue.
The only thing Connecticut and other states have to do to fix this is change their tax policy. Make it more attractive for people to live there.