Studies show that high income taxes in California and New York are driving the Texas real estate market as more and more people and companies leave high tax states and move to low tax states. The big winners states like Texas, Florida, Arizona, Nevada and Tennessee continue to grow population because they offer a great quality of life and low or no state income taxes. And, even though home prices have gone up in low or no income tax states, they are still much lower than home prices in California and New York. So homebuyers are taking their equity when they move to buy more house in these low or no income tax states.
Clearly, now that so many people are working from home and can live anywhere, they are looking for a greater quality of life, which not only includes the ability to buy a nice home at a reasonable price; but also more disposable income. It is not about how much you earn so much; but how much you get to keep. We can't avoid federal taxes no matter which state we live in; but choosing a low or no income tax state raises the amount of money we get to keep.
People vote with their feet and it has been happening for years. But now people are even more mobile since jobs are plentiful and or people are choosing to work from home. Elected representatives in high tax states should heed the warning signs. They are turning people away by high tax policies. They could be left with few people paying taxes since generally lower income people in those states pay little or no income taxes. Then what?
