Just Add SALT: New York's Loss, Florida's Gain!
Let’s face it, Miami may very well be the spiciest city in America. We even have two whole months—Miami Spice—dedicated to the flavors that make Miami, well, Miami.
It may have something to do with being perched so enviably at the crossroads of Latin America and the Caribbean or even that steadfast self-assuredness but in Miami, hot is more than temperatures that sometimes flirt ever so dangerously with the sun—muy caliente!
Now add SALT and the resultant mix is the perfect serving for growth—not just for Miami but for all of Florida as well as for a few other states. But in typical Miami style, we’ll keep the gaze on the Sunshine State and how it is set to satiate those fleeing what they deem to be ‘tasteless caps,’ including, according to the New York Times, the President of these United States himself.
You might call the Times’ glaring headline, “Trump, Lifelong New Yorker, Declares Himself a Resident of Florida,” an omen, granting glimpses of an exodus of presidential proportions. According to the Times, “President Trump—rich, bombastic and to many Americans the epitome of a New Yorker—was intertwined with the city he called his lifelong home.”
That is, until late September when he and wife Melania filed official documents declaring Florida their residence of record.
There is much conjecture as to the why, but according to the Times, a source close to Trump cited ‘taxes,’ as well as the President’s cantankerous relationship with his hometown politicos, as primary motivators.
Trump is not the only one trading the harshness of New York and environs for friendlier turf. Indeed, the Tax Cuts and Jobs Act (TCJA) of 2017 which left many feeling ‘trumped,’ is forcing well-to-do Northeasterners to seek refuge from parts of the Act that cap their Sales and Local Tax (SALT) deductions. The Empire State, for example, is disgorging people who find the meager $10,000 SALT cap, well, unpalatable.
The mass departure from New York and other high-tax states including New Jersey and Illinois, is only expected to accelerate throughout the coming years. That is good news for Florida and other lower-tax states that are all too ready to receive the influx of both individuals and businesses seeking shelter.
Taking the proverbial bull by the horns, the ever-opportunistic Miami even deployed campaigns in targeted high-tax cities. Back in April, for example, Codina Partners, a Miami-based real estate development company, launched its “Unhappy New Yorkers” campaign in an effort to seduce those who can quite frankly go cap-free.
According to the campaign’s website, besides great weather, savings is the bait—make more, keep more. For example, the site listed total savings for people moving to Florida as $24,649 for someone with an income of $100,000; $49,509 for someone with an income of $200,000 and $235,197 for people with incomes of $1 million. And if your income is $5 million, well, expect to save of a cool $1,238,286.
The courtship doesn’t end with developers. Miami’s Downtown Development Authority has Chicago-area businesses in its scope, promoting the Magic City as the “Wall Street of the South” to help sway a move that would mean savings for companies and at the same time an infusion of economic activity for the city.
“There’s a great opportunity with the tax law changes,” Miami DDA Deputy Director Christina Crespi told FOX Business, adding that the agency is in talks with varied Chicago firms interested in moving, while a similar initiative in New York has already driven a number of hedge funds to Florida.
New York Governor Andrew Cuomo greeted news of the President’s changing zip codes with what some might call the ultimate dis: “Good riddance!” The governor might be less thrilled to wish bon voyage to the hordes of residents leaving his state as he contemplates creative strategies to combat an estimated $2.3 billion shortfall.
The governor, whom the President sees as an irritant, enthusiastically ceded Trump, remarking, “He’s all yours, Florida.” Well, as New York grapples with the fallout from SALT, with an anticipated surplus of $200 million, Florida is said to be flirting with reducing property and sales taxes.
And, while for example, New York’s population was on the decline in 2018, Florida experienced a nearly two-percent increase, making the Sunshine State more populous than the Empire State. Perhaps consequently, at 3.8 percent, Florida’s GDP grew a full percentage point over New York’s 2.8.
“The influx of people seeking refuge from high taxes isn’t revolutionary,” said Jerome Soimaud, founder of the BiscayneBayDirectory.com, a website celebrating the virtues of life on Biscayne Bay.
“There is nothing new under the Florida sun, you could say. Back in November 1924, for example, Amendment 5 of the Florida Constitution ensured Floridians would be free from income and inheritance taxes. That, combined with aggressive campaigns promoting Miami’s enviable weather and abundance of land led to the first real-estate boom,” said the French transplant.
Nearly a hundred years later, that enviable weather is still a draw. So too is the prevailing open door to those seeking respite from chafing caps.
According to the New York Post who cited SALT as a possible push, billionaire investor and notorious corporate raider Carl Icahn, who just happens to live in the Village of Indian Creek—that ‘moneyed’ enclave behind the scenes of Miami, is moving his company from the Big Apple to the Magic City, threatening to lay off his staff unless they follow suit. Well, if Carl can, they too can revel in Florida’s freedom from income tax.
See, the Sunshine State still keeps a seat at the table for those who loathe the hypertensive qualities of too much SALT. A laid-back approach, say one where salt is still a condiment, is always on the menu and is best enjoyed with, ahem, margarita!
But don’t forget to share the dough—it stretches farther in the Sunshine State where even the sea is salt to taste!
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