New York is facing a $2.3 billion deficit thanks to its high tax rate and the tax law changes brought about by the Tax Cuts and Jobs Act. In a frantic effort to raise the money it needs, the state is going after rich residents who are leaving in search of low state tax rates.
The state’s auditing efforts, which were already intensive before President Trump’s landmark tax legislation, have become even more intrusive as the government in Albany steps up its efforts to audit rich former residents. In fact, one mainstream news outlet has labelled the effort as nothing short of stalking.
Apparently, nothing is off limits to the state of New York in its effort to ensure that the rich pay every last cent of taxes. New York auditors are checking not only credit card bills but even cell phone records, social media sites, vet records and dental records. They are looking in people’s refrigerators and dresser drawers. Auditors are also examining the residences of those who claim to have moved out of state to see what items are being left behind. They typically check for prized artwork, sentimental items such as wedding albums and jewelry, safe-deposit boxes and family photos.
Auditors also make sure that the rich person who says he or she has moved out of state has taken the family dog along. Rich people who have moved out of state are expected to prove that they have country club membership and a wealth manager in their new state.
New York’s efforts to ensure that the rich pay every last penny in taxes is quite profitable. Records reveal that, from 2010 to 2017, the state’s strict auditing process added more than $1 billion to the budget. Those who fought against the extra tax charges brought on by the tax audit lost more than half the time.
Out of court settlements were not uncommon, and New York continued to hound people that it has audited in the past in the hopes of extracting even more revenue. However, the Tax Cuts and Jobs Act has taken the problem up to another level. The state is desperate to keep revenue flowing, and that revenue is rapidly departing for states such as Florida. To make matters worse, it won’t take much to tip New York into serious financial problems as it has been estimated that a mere 1% of New York’s residents pay close to 50% of all its taxes.
Given these facts, it is not hard to see why New York is upping the ante and pursuing literally any rich person who claims to have moved out of New York to a state that does not have state income taxes. However, while harassing rich people by auditing them is proving to be successful short-term, it is certain to be counterproductive long-term. Rich people will actually leave the city instead of just pretending to move out. Moreover, wealthy individuals from other states will almost certainly think twice about moving to New York if they know that the city will simply use them as a state piggy bank.
~ Patriotic Freedom Fighter