Tax Strategies in High-Tax States Under Scrutiny
Jonathan Turley, a law professor at George Washington University, raised concerns recently about aggressive and questionable tax measures emerging from high-tax states, particularly those run by Democrats.
New York Governor Kathy Hochul has proposed a new tax aimed at wealthy individuals who own property in the city but no longer live there. Turley discussed this on the show “Kudlow,” arguing that such efforts epitomize legal overreach, as they target people who have already left the state.
“Blue states are attempting to counter this outflow by retroactively enforcing taxes, almost as if they’re trying to hold onto people who are no longer there,” Turley remarked to host Larry Kudlow. He likened this to a “deranged ex-spouse” in denial, insisting, “You never truly left us. You still care; your belongings are still here, so you must want to come back.”
He pointed out that the tax strategies of blue states reflect economic weaknesses in places like Texas and Florida, where people and businesses are gravitating towards, but these policymakers are not focusing on attracting new residents; instead, they’re fixated on locking in those already looking to leave.
“This situation is downright strange. Economies are shrinking, and there’s this flow of wealthy individuals and companies toward friendlier environments,” Turley stated. “Rather than draw in new inhabitants from places like Texas or Florida, they’re trying to entrap those who want to depart.”
The pied-à-terre tax is part of a broader trend of tax hikes in blue states, including Washington and Virginia, aimed at taxing affluent residents before they relocate. California and other states are also mulling over retroactive wealth taxes and rules, dubbed “teddy bear laws,” that would treat emotional connections to the state as grounds for tax residency, even after leaving.
Additionally, California is advocating a millionaire tax that would impose a one-time 5% levy on individuals with a net worth exceeding $1 billion, potentially tracking former residents based on their companies’ valuations. This raises concerns among business owners about the implications of retroactive taxation and interstate tax reach.
