The growing tax burden at the state and local level is getting the attention of wealthy investors, and not in a good way.
Years ago, only about one-quarter of high-net-worth investors contemplated relocating and changing their residence to low-tax or no-tax states to cut their tax bill.
Now, that number is almost one-half, says the Spectrem Group, an investment research firm that surveyed wealthy investors (those with $25 million or more in investments).
High state and local taxes, especially in California, Illinois, and the Northeast, are prompting affluent investors to contemplate moving to Florida or other low-tax states.
Spectrem’s research shows an overwhelming majority of wealthy investors surveyed are concerned about state and local income taxes. What has changed now is that the COVID-19 pandemic has shown people how easy it is to move, work remotely, or relocate a business, making the idea of relocating much more popular.
“The percentage of investors concerned over taxes has increased significantly,” reports Spectrem. That’s especially true now with so many tax proposals on the table in Washington.
As a result, many investors are now likely to start conversations with their advisors on tax strategies to produce more income and save money on taxes in retirement, and options to transfer wealth tax-efficiently to the next generation.