You may recall this piece I wrote to you, Maximize Your Retirement by Leaving Income Taxes Behind. A reader friend of mine wrote and asked why our favored state of New Hampshire didn’t make the cut. After all, he noted, what’s not to like about no sales or ordinary income taxes? Agreed. But unfortunately, NH does levy a five percent tax on dividends and interest—a form of income especially in retirement. There’s always room for improvement. New Hampshire legislators introduced SB 404 on March 15, 2018, which would have phased out the five percent tax over a five-year period and ultimately … [Read more...]

If you have a solid retirement portfolio, chances are you are paying federal taxes on the income it generates. If you're unlucky enough to live in a state with its own income taxes, you could be paying even more. There is one foolproof way to get more from your retirement revenue streams, and that is to move to a state which doesn't force you to pay taxes on your income. I have written a number of posts on how you can determine where best to live in retirement. Here's a sample: Your Retirement Life: Looking for Tax Freedom? Here’s Where to Find It Your Retirement Life: How Do You … [Read more...]

The low taxes and warm weather of Florida have enticed millions of retirees to the Sunshine State. Now, Maine's term-limited governor, Paul Le Page has told the Portland Press Herald that he'll be the next Northeasterner to become a snowbird (heading south in the winter and spending summers in the north). When asked about his plans, Le Page answered in a way that many retirees would understand, according the Press Herald he stated: “I’ll tell you very, very simply: I have a house in Florida. I will pay no income tax and the house in Florida’s property taxes are $2,000 less than we were paying … [Read more...]

It is important to analyze your political situation. Is your state taxing you unfairly? Is there an alternative? I wrote this piece on October 8, 2018 to encourage Americans to think about what happens when wealthy taxpayers flee punitive taxation. Who will pay for a state's government when there's no one left with any money? My friend Chris Edwards, director of tax policy studies at Cato and editor of www.DownsizingGovernment.org, outlines the hypocrisy in the way states run their tax schemes. He points out that states' biggest tax payers are sensitive to the top marginal rates, and when … [Read more...]

If you’re a politician the easiest way to grow “revenue” is to treat your successful residents with respect—respect for their money that is. And yet time and time again politicians do the exact opposite. Is it any wonder the most successful New Yorkers spend at least half the year in Florida? The Wall Street Journal editorial board chides Governor Andrew Cuomo for his tone deaf assessment of why people are fleeing the Empire State. They write: Andrew Cuomo is on a roll. After a deft rebuttal of President Trump last month—America “was never that great”—the New York Governor has now finessed an … [Read more...]

If you have a few minutes I believe your time will be well spent reviewing this piece I posted back on February 16, 2018. During your working career you can make adjustments on the fly. Paychecks are still coming in, and you can cut some spending to shore up holes in your savings plan. But once you retire, there's no more income to offset any unexpected spending you may have done. That's why you must be acutely aware of how you position yourself and your money in retirement. After you have invested your money to best avoid risk, the biggest threat to your income is taxation. Retirees … [Read more...]

One of the less touted but possibly most significant outcomes of the Trump tax reform was forcing states into greater competition over taxation. States with already high taxes had the sheet pulled off their ugly policies. The tax reform bill stripped those high taxing states of the federal deductions that had masked their inefficient policies. With all states now competing on an even playing field, citizens are getting a first hand look at just how badly their states have been bilking them. At the Cato Institute, Chris Edwards writes that high income earners, who were already fleeing high … [Read more...]

“I divided the country into the 25 highest-tax and 25 lowest-tax states by a measure of household taxes. In 2016, almost 600,000 people moved, on net, from the former to the latter,” writes Chris Edwards, director of tax policy studies at Cato in his study Tax Reform and Interstate Migration. “People are moving into low-tax New Hampshire and out of Massachusetts. Into low-tax South Dakota and out of its neighbors. Into low-tax Tennessee and out of Kentucky. And into low-tax Florida from New York, Connecticut, New Jersey, and just about every other high-tax state.” Read more … [Read more...]

The Cato Institute has released its much anticipated Freedom in the 50 States ranking. Scoring best of all fifty states was Florida. The researchers who put together the scores highlighted Florida's lack of an individual income tax and the Sunshine State's economic freedom as its top draws. Here's what they wrote about Florida: Lacking an individual income tax and featuring a hot climate, Florida has long enjoyed substantial migration of well-off retirees. But as we’ve noted in the past, the state attracts more than seniors, as others vote with their feet for good weather and the increased … [Read more...]

My take-away from this excellent piece by Joel Kotkin is that keeping more of your money matters. In other words, state taxes matter. Look at the magnetic pulling power of the three power states in the sun belt with no income taxes: Texas, Tennessee, and Florida. It turns out state lines can be re-drawn with the help of overbearing government excess. Because the new California is Texas and Tennessee, and the new New York/New England is Florida. Money travels to where it’s treated well. Just don’t tell the politicians. Kotkin writes in Forbes: Among the 71 largest metro areas, the biggest … [Read more...]