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Sunday, January 15, 2006


In the world of tax, there are low tax and high tax countries. The tax rates of countries have very real effects on the flow of international capital, since all other things being equal (which of course they are not), capital will seek to locate itself in the jurisdiction with lower taxes.

The same tax competition exists between the various states in the United States. For example, New York State is generally a high tax jurisdiction, and Florida is on the lower end of the scale. Among the disparities in taxation, an important one is that New York State presently has an estate tax, and Florida does not. Due to the tax disparity, a fair number of New Yorkers move to Florida (at least upon retirement) to benefit from the lower tax environment. Yes, the weather may also have something to do with it, too.

Maybe the retirement traffic to Florida will be slowing a little - Governor Pataki of New York is proposing the elimination of New York estate taxes. Now, if he only had control over the weather, too, a key source of immigration into Florida might wither away completely!

Link to Article

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