The Internal Revenue Service (IRS) publishes data each spring on how individuals and their Adjusted Gross Income (AGI) migrate from state to state. The mass exodus of higher income taxpayers from higher tax states has accelerated in recent years.
In 2021, 105,000 people left Illinois removing $10.9B in AGI from our economy. That number was up from 2020 when it was $8.5B. In 2019 it was only $6B that left for greener pastures.
States with higher taxes all saw decreases in AGI. New York lost $24.5B and California lost another $29.1B in 2021.
The states with the lowest tax rates gained more than $100B during the pandemic. Florida, with an income tax rate of zero, gained $39.2B in AGI with 10% of it coming from Illinois alone.
When will our elected officials learn the oldest rule of taxation? Voters vote with their feet.
Let me leave you with this.
Turbotax recently reached a $141M settlement in a national fraud case led by New York Attorney General Letitia James. They were found guilty of “predatory and deceptive marketing practices” when they charged over 4.4 million low-income taxpayers fees who were eligible for free, federally subsidized services. The years included in the suit were 2016 – 2018.
If you were impacted by this wrongful action, you’ll be notified via email from Rust Consulting, the settlement fund administrator. Checks are supposed to begin going out in May. The payouts range from $29 – $85, depending on the number of years that were wrongfully charged.
In other news First Republic Bank, another of our nation’s largest banks, was seized by Federal Regulators and sold to JPMorgan Chase last Sunday. This was the second largest bank failure in US History.
It was also the third major bank failure we’ve had in the past couple of months.
I’m telling all of you here and now, that we haven’t heard the end of these bank problems. We’re probably just at the beginning.
These failures were due to runs on the banks, where they lost significant amounts of their deposits. We haven’t even begun the nightmares that banks will have given the imminent commercial real estate recession. When those bad loans cause further liquidity problems, many more will have similar problems.
Make sure you don’t keep more than $250K in any one bank at any time. Sooner or later the Federal Government will stop trying to ride in on their white horse.
I don’t want anyone losing their hard earned dollars because they have the bad luck of keeping it in the wrong bank.
We’re all going to get through this. Let’s get through it together.
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