Reprinted with permission from TheNewAmerican.com.

Realtors in Nevada, just across the border from California, are feeling the positive effects of Trump’s new tax reform. Real estate developer David Hutchinson is offering building lots for sale at Clear Creek Tahoe and told Robyn Friedman of The Wall Street Journal:

Most of our lot sales are to buyers from California, the vast majority of whom intend to make them a permanent residence.

If you’re a wealthy tech executive from the Bay Area who can live wherever you want and you have a $3 million [annual] income, you would have $399,000 a year in savings [by moving] here.

That’s a lot of money to spend on real estate.

That’s also a lot of money that California isn’t going to see. Arthur Laffer and Stephen Moore, also writing in the Journal, did the math:

Consider what this means if you’re a high-income earner in Silicon Valley or Hollywood. The top tax rate that you actually pay [under the new tax reform rules] just jumped from about 8.5% to 13%.

Similar figures hold if you live in Manhattan, once New York City’s income tax is factored in. If you earn $10 million [a year] or more, your taxes might increase [by] a whopping 50%.

Those new rules now cap SALT deductions — for state and local income and sales taxes — at $10,000. Under the old rules there was no cap, allowing high-income earners to claim large deductions on their federal income-tax returns. Prior to tax reform, those deductions were worth about $100 billion in 2017. With most of those deductions going away, high income earners are considering their alternatives. What they realized is that if they stayed put, they would be bearing more of the true cost of their state’s government.

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