Thursday, April 17, 2008

Those damned, pesky rich people, they just won't

stay put.

Link
And while income, capital gains, and estate taxes are key concerns, watch out for state taxes. New York State is considering a millionaire's tax—something tried in New Jersey with mixed results.

"People picked up and moved," Jack Meola, a tax attorney and partner at Amper Politziner & Mattia says of the New Jersey experience. "The rich are the most mobile people in the world. I have clients with no state domicile. They're doing business all over the world. They've put their homes in trusts, so they personally have no jurisdiction. One client lives on a boat. Most move to nontaxing jurisdictions, like Las Vegas and Florida."

These mobile individuals set up trusts so that when their businesses are sold, they don't feel a tax pinch.

For the state, the effort backfires, he notes. Diminishing populations of wealthy individuals result in a trickle-down effect that builds pressure on low-income people to carry the tax impact.