As SALT residents and staff in New York, we see firsthand how high tax rates drive individual decisions by taxpayers as well as enforcement efforts by tax department. On the taxpayer side, we found substantial (albeit anecdotal) evidence that taxpayers will make decisions about where to work or live based on their taxes. We saw this in 2018 with the explosion of activity after the implementation of the SALT cap, and again in New York in 2021 when, with Covid, taxpayers left New York at record speed, just in time for New York. Legislators raised the top combined tax rate for New York State and city taxpayers to 14.7%. Of course, over the years, New York has become a leader in implementing personal income taxes, especially in residential areas, to address the movement of taxpayers in and out of the country. the state. For example, during the years 2018 to 2022, the tax department reports that it conducted more than four thousand audits per year. Recently, the tax department has implemented a special mass “audit desk” program to have a process that immediately questions taxpayers who left the state in 2020 or 2021.

As SALT income tax practitioners, we have never seen this kind of volume in other states, in part because people Getting to and from New York can be much more than in other states. But part of it is that there has to be a reason why people come and go – or more likely Go— has to do with the amount of New York taxes that must be paid to live and work in the state. Indeed, with the exception of California, no state comes close to the 14.7% that New Yorkers must pay at New York’s highest tax rate.

But is that changing? Two years ago, Washington – a state with no income tax – passed a special tax of 7% for taxpayers with income.[1] This tax is still pending at the moment, because of the public court, but it is a surprising move by the government that never had a personal tax.[2] And last October, Massachusetts voters approved a constitutional amendment imposing a 4% additional tax on taxpayers with income over $1 million, which starting in 2023 would bring the Massachusetts tax rate to 9%.[3] This has led us to receive many calls for Massachusetts evacuation advice. Not to be outdone, California, a state that already boasts one of the highest tax rates in the country (13.3%), proposed to impose an additional 1.75% tax on those taxpayers with personal income of more than 2 million dollars per year. the vote last November.[4] Lucky for Golden State taxpayers, voters rejected a measure that would have given California the highest tax rate in the United States. In 2021, Washington DC raised its top income tax rate to 10.75%, joining a group of blue states (or counties in their case) to increase their tax on taxpayers with income over $1 million.[5]

Will other states follow suit? If we just think about the general trend, it seems very unlikely that states like Florida or Texas will pass the income tax or the law to do so. But with 52% of Massachusetts voters in favor of raising interest rates, will other states see it as an opportunity to do the same? How about Connecticut with a rate of 7%, it is clear now compared to New Jersey (10.75%), New York and Massachusetts. What about Pennsylvania (3%) and its newly elected Democratic governor? Or states like Virginia (5.75%), Michigan (4.25%) and Nevada (0%)? Could these blue (or purple) states follow Massachusetts’ lead? And if they do, will there be room in Florida for former residents of those states?

Only time will tell, and 2023 probably won’t be the year, as it looks like we’re already in the next election cycle in 2024. It will be interesting to see how Massachusetts evolves in the state. variety in the coming years. or that.

[1] Corporate income taxWashington State Department of Revenue, available at:

[2] The State of Washington appealed the ruling to the Washington Supreme Court. While the appeal is pending, the Department of Revenue will continue to provide tax compliance instructions to the public. SEE THE

[3] Kate Dore, Massachusetts voters approve ‘million tax.’ What does this mean for the rich, CNBC (Nov. 10, 2022). Available at:

[4] California Proposition 30, Tax on income over $2 million for zero-emission vehicles and fire prevention initiatives (2022). Available at:,_Tax_on_income_above_$2_Million_for_Zero-Emissions_Vehicles_and_Wildfire_Prevention_Initiative_(2022).

[5] Jared Walczak, DC tax increases help Maryland and Virginia, but not DC, The Tax Foundation (July 26, 2021). Available at:

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