How will housing market perform in low-tax states?
Rogers Healy and Associates Real Estate owner and CEO Rogers Healy says there will be a steady increase in demand in the housing industry.
Treasury Secretary Steven Mnuchin defended the Trump administration’s controversial cap on state and local tax deductions before House lawmakers this week suggesting that in order to avoid negative economic consequences the states should reassess their tax burdens.
Continue Reading Below
In response to a line of questioning from Democratic New York Rep. Tom Suozzi, Mnuchin said he believes the $10,000 SALT cap is fair and he acknowledged that a number of wealthy residents have left high-tax states since the measure was implemented.
“I think that’s quite unfortunate,” Mnuchin said. “I think that some of those high-tax states like New York and California should think about lowering their taxes.”
More people moved to Florida, which has no statewide income tax, than any other state last year. And New Yorkers moves to the Sunshine State were the highest – 63,772 people. New York had the third-largest volume of people leaving the state, with 452,580 people moving out within the past year.
HIGH-TAX NEW JERSEY TRIES FOR NEW SALT CAP WORKAROUND
NEW YORK, NEW JERSEY, HAVE HIGHEST RESIDENT EXODUS IN 2019
As previously reported by FOX Business, Florida raked in $16 billion in 2018 from movers, which was more than any other state. On the other hand, New York and California lost a significant amount of income from residents that moved out, about $9.6 billion and $8 billion, respectively.
Mnuchin acknowledged on Tuesday that when the wealthy residents leave, if states do not lower their tax burdens, the residents who are left are forced to pick up the slack.
Trump has slammed high-tax states, particularly New York, over its tax laws, saying they are causing people and businesses to flee the state in “record numbers.” Trump also recently announced his decision to change his primary residence to Palm Beach, Fla.
Last year, he said he was “open” to discussing changing the SALT cap, but Mnuchin said Tuesday he had not spoken with the president about that recently, but said he would bring it up with him.
CLICK HERE TO READ MORE ON FOX BUSINESS
The House of Representatives passed a bill to overturn the cap in December. The bill would repeal the provision in 2020 and 2021, while allowing the cap for married couples to double to $20,000 in 2019. The changes would be paid for by raising the top income tax rate on the wealthiest individuals to 39.6 percent, from 37 percent, which would restore it to pre-Tax Cuts and Jobs Act levels. Further, it would lower the income threshold for people who would be exposed to the top rate. Both of those changes would stay in effect through 2025.
New York, New Jersey, Connecticut and Maryland filed a lawsuit to have the SALT cap overturned, which was thrown out by a judge last year. The states filed an appeal over that decision in November.
Mnuchin had made similar comments about the SALT cap’s effect on high-tax states in the past. In 2017, he said he hoped the measure, which is part of the Tax Cuts and Jobs Act, sent a “message” to high-tax states to “get their budgets in line.”
CLICK HERE TO GET THE FOX BUSINESS APP
Source: Read Full Article