bodhipooh wrote:
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Sutherland wrote:
Then who is buying up all of this real estate? I realize the real estate market in NYC and some areas of NNJ have cooled in part. But that's in part because the numbers had reached super, super stratospheric heights. Still, even with the dip, prices are high and people are still buying expensive real estate. In Asbury Park at least 20 units in the Ocean Club sold for anywhere from $1mm to $5mm. Properties in JC are still moving as are properties in the several million mark in NYC. It seems to me there's plenty of money floating around.

A lot (most?) of the high end real estate in NYC/Manhattan is being snapped up by foreigners who don't have to pay state taxes on income. As the real estate market in NYC has remained hot for so long, people have been pushed out into other areas, such as the ones you point out in your message. In many ways, Jersey City, and much of NJ, has benefitted from the overly-hot NYC real estate market, as people leave NY and relocate here.

The problem with foreigners snapping up real estate (which is also a problem locally in JC, btw) is that it can artificially inflate a local market but those buying properties don't contribute to state coffers much, if at all. They are not subject to state income taxes, and property taxes are super low in NYC.

Sutherland wrote:
Then who is buying up all of this real estate? I realize the real estate market in NYC and some areas of NNJ have cooled in part. But that's in part because the numbers had reached super, super stratospheric heights. Still, even with the dip, prices are high and people are still buying expensive real estate. In Asbury Park at least 20 units in the Ocean Club sold for anywhere from $1mm to $5mm. Properties in JC are still moving as are properties in the several million mark in NYC. It seems to me there's plenty of money floating around.

K-Lo2 wrote:
Unless most of those millionaires were renters, someone (other than Dixon Leasing in one city) is buying all of that real estate. Odds are most of them are millionaires too. What don't I get?

bodhipooh wrote:
I love reviving this thread every year, as annual data comes out that clearly repudiates the narrative pushed by Dolomiti and other so-called progressives who think you can continue to raise taxes on people year after year and that people will continue to take it.

From the thread below, the idea that taxes can spur people to leave NY/NJ was dismissed as a myth. Too bad the data does not fit that characterization.

https://www.wsj.com/articles/in-florid ... he-tax-relief-11578501325

https://nypost.com/2019/12/30/new-york ... -an-alarming-rate-report/

biggoron wrote:

My presumption is that people are leaving the rural parts of the state for which jobs and the weather (for upstate NY) are much bigger factors then taxes. In the urban areas across the country (NYC, SF, etc) I see housing prices as more of a problem then taxes or other factors, but I doubt cities and towns will allow for sufficient density to meet demand.

Dolomiti wrote:
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hero69 wrote:
i'm not surprised that many ultra rich people are moving to lower tax regions of the country.

Again, that rarely happens.

For example, let's say you're an investment banker at JPM. Are you going to quit and move to Florida solely to whack a few grand off your taxes?

As you get older (and are paid more, and accumulate more assets) you develop more ties to the community. Moving means taking kids out of school, leaving friends and family and business networks behind. It also means reducing or losing access to NYC, including all those job and business opportunities, cultural institutions, and so on.

If NJ announced tomorrow that it will tax incomes higher than $1 million at a 70% tax rate, that would motivate the 1%ers to leave. Are they going to move to Florida, because they want to pay a 1% property tax instead of 2.3%? I don't think so. They'll just hire a good accountant to reduce their tax liabilities.

The idea that people flee a state because of higher state taxes is not reality. It's a myth.

Yvonne wrote:
I know a tax consultant who lost many clients to Pennsylvania. He raised the price of his services but it comes to a point where some businesses will leave.

Dolomiti wrote:
The idea that people flee a state because of higher state taxes is not reality. It's a myth.

hero69 wrote:
i often hear about people fleeing the northern states for the cheaper southern areas

JSleeze wrote:
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stateaidguy wrote:

This conversation is about if a decline of the # of millionaires in NJ will have a fiscal impact on the State, so it is relevant that the top 1% of earners pay 43% of NJ's income taxes because a small drop in the high-earner population will have a disproportionate fiscal effect.

This is a back of the envelope estimate, but if the number of filers in NJ with $1 million or more in income fell by only 1,000 , it would be a loss of at least $100 million in income taxes, since those $1 million income people would pay (at least) an average $100,000 in income taxes each.

$100,000 x 1,000 = $100 million

We aren't talking about the "fairness" by progressive definition of the NJ tax code, where paying 43% of income taxes might be construed as "unfair" if the top 1% possesses more than 43% of the state's income.

However, the top 1% in NJ doesn't earn 43% of the money. I don't have the number, but it's a little less than that.

This conversation is about people with assets in excess of $1 million. You're confusing net worth with income. People with $1 million in assets (e.g. someone who owns a 2br condo in 77 Hudson or Crystal Pointe) typically makes far less than $1 million per year.

hero69 wrote:
i'm not surprised that many ultra rich people are moving to lower tax regions of the country.

stateaidguy wrote:

This conversation is about if a decline of the # of millionaires in NJ will have a fiscal impact on the State, so it is relevant that the top 1% of earners pay 43% of NJ's income taxes because a small drop in the high-earner population will have a disproportionate fiscal effect.

This is a back of the envelope estimate, but if the number of filers in NJ with $1 million or more in income fell by only 1,000 , it would be a loss of at least $100 million in income taxes, since those $1 million income people would pay (at least) an average $100,000 in income taxes each.

$100,000 x 1,000 = $100 million

We aren't talking about the "fairness" by progressive definition of the NJ tax code, where paying 43% of income taxes might be construed as "unfair" if the top 1% possesses more than 43% of the state's income.

However, the top 1% in NJ doesn't earn 43% of the money. I don't have the number, but it's a little less than that.

JPhurst wrote:
States have been able to balance their budgets and fund necessary programs by raising taxes on the highest bracks. California and Minnesota are examples. Meanwhile, Kansas's experiment with uber-supply side economics fared poorly.

But it is equally true that.

a) Relying too much on high bracket income taxes makes a state more vulnerable to economic swings.

b) The money has to be spent wisely.

Monroe wrote:
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brewster wrote:
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Monroe wrote:
The top 1% of NJ taxpayers pay 43% of NJ income taxes.

A meaningless statistic without their percentage of NJ income earned.

Not sure, but given NJ?s income tax is very progressive I?m sure it?s even worse. Top earners pay quite a higher % than low earners.

brewster wrote:
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Dolomiti wrote:
The same research entity ("Wealth-X" -- who?) also indicated that NYC alone had nearly 1 million millionaires.

Yes, being a millionaire is not nearly as impressive as it once was. All it takes is having bought a nice house or apartment 20 or 30 years ago. Remember laughing at Dr Evil demanding a million dollars ransom? And that was quite some time ago.

Dolomiti wrote:
The same research entity ("Wealth-X" -- who?) also indicated that NYC alone had nearly 1 million millionaires.

MDM wrote:
What happens when one billionaire moves to Florida: David Tepper blew a hole in the state budget.

brewster wrote:
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Monroe wrote:
The top 1% of NJ taxpayers pay 43% of NJ income taxes.

A meaningless statistic without their percentage of NJ income earned.

Monroe wrote:
The top 1% of NJ taxpayers pay 43% of NJ income taxes.