The Republican proposals in the House and Senate would eliminate deductions for the majority of state and local taxes, meaning people with an annual salary of $1 million could end up owing the IRS an extra $21,000, according to Bloomberg.
The plan would impact salary earners much more than investors, with a person making $1 million from investments saving roughly $7,000.
The possible change has fueled talk of moving among wealthier residents of the Northeast, where individual tax rates rank among the highest in the country. Florida has emerged as a prime possible destination for them thanks to its lack of a state income tax.
However, David Silver, a senior manager at the accounting firm MBAF, told Bloomberg he thinks talk of moving is mostly hot air.
“I would argue it’s probably not all that likely to uproot your family, leave your friends, and put your kids in new schools just because of proposed tax changes,” he said.
The GOP tax plan has proven popular so far with the commercial real estate industry, but it is significantly less popular on the residential side, as it could increase the cost of homeownership. [Bloomberg] – Eddie Small