Yankees Seek Tax Refuge in the Deep South

Florida seems to have been invaded by zombies.

“Injured in a workplace accident? Treated unfairly? Call 1-800-A-LAWYER.” The signs are along the highway…on the radio…and in magazines. Chasing ambulances must be good business in Florida. The advertising must pay.

We got back from Florida on Wednesday and immediately got stuck in a traffic jam. The Washington, DC beltway must be one of the worst traffic areas in the US.

Later, we went to dinner in Bethesda. The downtown area has been spiffed up – like a mall. Restaurants have been replaced with noisy, crowded eateries where you stand in line to get a table…and then wait to get an entree scarcely more refined than a McDonald’s Happy Meal.

Meanwhile, Forbes Magazine tells us that people with money are on the move – from the North to the South. Why? Taxes. Cost of living. Lifestyle.

Judging from what we’ve seen in the Maryland suburbs, it’s not surprising that people are moving out. It’s surprising that anyone is left:

Where America’s Money Is Moving

Topping the list: Collier County, Fla., which includes the city of Naples. Tax returns accounting for 15,150 people showed moves to Collier County from other parts of the country in 2008, the latest year for which IRS data is available. Their average reported income: $76,161 per person – equivalent to $304,644 for a family of four. Although slightly more taxpayers moved out of Collier County than into it, the departing residents’ average income came out to just $26,128 per person.

Households that moved to Collier County principally came from other parts of Florida, with Lee, Miami Dade, Broward, Palm Beach and Orange counties leading the list. Big northern cities also sent lots of migrants: Cook County, Ill. (home to Chicago); Oakland County, Mich. (near Detroit); and Suffolk County, N.Y. (on Long Island) each sent more than 100 people to Collier County during 2008.

In second place is Greene County, Ga., with a population of just 15,743 at the Census Bureau’s last estimate. The IRS data show that in 2008, 788 people moved to the county, about 75 miles east of Atlanta.

Rounding out the top five: Nassau County, Fla., near Jacksonville; Llano County, Texas, 70 miles northwest of Austin; and Walton County, Fla., 80 miles east of Pensacola.

The dominance of the list by Florida and Texas – the former has eight of the top 20 counties, the latter four – makes sense to Robert Shrum, manager of state affairs at the Tax Foundation in Washington, D.C., since neither state has an income tax. “If you’re a high-income earner, then that, from a tax perspective, is going to be a driving decider if you’re going to move to one of those two states,” Shrum says.

After accounting for property taxes, Shrum’s analysis shows that Texas has the fourth-lowest personal tax burden in the country, and Florida has the eighth lowest. Shrum also points to eight states that have targeted wealthy households with extra-high tax brackets: California, New Jersey, New York, Maryland, Hawaii, Oregon, Connecticut and Wisconsin. Six of the top 10 counties the rich are fleeing are located in those states.


Bill Bonner
for The Daily Reckoning

The Daily Reckoning