http://www.bloomberg.com/news/2011-...ch-people-moving-treasury-economist-says.html NJ Taxes Cause Rich People to Move, Economist Says Q By Elise Young and Terrence Dopp - Nov 14, 2011 12:38 PM CT New Jerseyâs high taxes drive out wealthy residents, slowing the stateâs recovery, said Charles Steindel, the treasury departmentâs chief economist. Property, income and estate taxes are the top reasons people leave, said Steindel, who released a study of federal tax data and a survey of financial advisers today at an economic forum in Trenton organized by the treasury department. Governor Chris Christie, a first-term Republican, has twice vetoed measures sponsored by Democrats that would have raised income taxes on residents earning $1 million or more. Senate President Stephen Sweeney, the stateâs highest-ranking Democratic lawmaker, said last week his party would push again for passage of a so-called millionaireâs tax. âThere is a relationship between state tax rates and where people move,â Steindel, a former senior vice president of the Federal Reserve Bank of New York, told reporters. âThe higher tax-rate states generally lose more people every year.â Steindel released the results of a survey of subscribers to the stateâs online newsletter, which includes financial advisers to high-wealth clients. More than half of the respondents said their clients had recently left or expressed interest in leaving, Steindel said. Three-fourths of those who expressed interest in leaving have incomes over $100,000, while 15 percent have incomes over $1 million, according to the survey. Location Decisions The stateâs losses from the 2004 millionaireâs tax, approved under former Democratic Governor James McGreevey, totaled about 20,000 taxpayers and $2.5 billion in income, according to Steindelâs study. âIs this the only thing on their minds? Certainly not,â Steindel said, referring to the effect of taxes. âIt does have an effect on the state economy and it does have an effect on peoplesâ location decisions.â New Jerseyâs economy was ranked the third-worst performing among U.S. states in the year through June 30, according to the Bloomberg Economic Evaluation of States Index, which uses data on employment, income, real estate, taxes and local stocks. The stateâs recovery lagged behind the nation, the three major credit-rating companies said when they each lowered New Jerseyâs bond ranking by one level this year. Unemployment Rate New Jersey has been âbumping the bottomâ during the recovery, as it lags neighboring New York City in job creation since the end of the recession, said Erica Groshen, a vice president at the Federal Reserve Bank of New York. New Jerseyâs unemployment rate was 9.2 percent in September, while the national rate was 9.1 percent. While its jobless rate is higher than the U.S. figure, its participation rate -- the proportion of the population that is either employed or looking for work -- is 65.9 percent, above the national rate of about 64.2 percent, Groshen said. A higher participation rate indicates a more ready workforce, she said. New Jerseyâs economy is poised to recover as officials practice fiscal restraint and fewer people leave the state, said Joel Naroff, president and founder of Naroff Economic Advisors in Holland, Pennsylvania. Reduced government spending in New Jersey will continue for at least two years, he said. While New Jersey has a housing surplus, it âhas not had the default crisis seen elsewhere,â Naroff said. With residents struggling to sell their homes, they have less flexibility to head to states such as Florida, where the cost of living is lower, he said. âIf you canât sell your house, you canât move,â he said. âExpect slowly improving economic and revenue growth, but not any surge coming from income, sales or corporate taxes. This is a slow population-growth state. Weâre slowing the âoutâ migration.â To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net; Terrence Dopp in Trenton at tdopp@bloomberg.net To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net
âThe higher tax-rate states generally lose more people every year.â --------------------- Usually the retired who take their pension with them. People who lose their high paying job with no hope of equal replacement income. Oh well..... This has been going on for years, unless other states raise taxes the trend will continue.
NC is full of people from NJ. Like mexicans, they are fine individually, but when they reach a critical mass, they seem driven to create the very environment that caused them to move in the first place.