Another Reason Why Wealthy Americans Are Moving

It’s becoming apparent that, along with other economic segments of the population, the wealthy are moving more than usual. A recent report from Goldman Sachs sheds some light on why.

According to Goldman, the state and local tax (SALT) dedication cap raised taxes by 4% for those top earners in California and New York, as reported by CNBC. Additionally, it increased taxes by as much as 12% versus what they would pay in no-income-tax states.

Overall, more than 6,000 people making more than $1 million left New York state due to SALT. Many of these wealthy Americans are moving from New Jersey, New York and California to Florida, Texas, Tennessee and Nevada—states with no income tax and warmer weather.

The migration is showing up in local housing markets. For instance, in Palm Beach, Fla., the average home price is $10 million because of a lack of supply, according to CNBC.

The migration of the 1% is a relatively recent occurrence.

Over the last decade, households earning over $150,000 were the least likely to move, according to Apartment List. For example, in 2010, the Census Bureau’s mover rate was 27% among workers living in households earning less than $25,000. For households earning $150,000 or more, it was only 9%.

But during COVID, those households posted the most significant jump in residential migration.

In households making over $150,000 annually, 16%  of workers moved, which was a 39% increase above the Census Bureau’s estimate in 2019, according to Apartment List. In addition, a smaller increase occurred among households earning between $100,000 and $150,000.

Remote work played a significant role in this migration.

The mover rate among remote workers in the highest income bracket jumped to 20%. That was twice the rate of on-site workers making similar salaries. Apartment List says the rate of migration was also higher among remote workers making lower incomes.