When the rich leave New York State because of high taxes, they are accused of being selfish, or not caring about the "schoolchildren, elderly, disabled, and homeless." Recently, two wealthy New York residents, Rush Limbaugh and Tom Golisano, changed their residencies to Florida to save thousands of dollars daily in taxes.
But, a new Siena poll shows that it's not just the wealthy who are fed up with the state and want to leave or would consider leaving. According to the poll, 11 percent said they'd leave "unless conditions in New York state get better" and 10 percent said they "would like to move out of New York
State as quickly as I can." Both responses were the highest ever for that poll.
But what's in a poll? More than you think. The Buffalo News reported earlier this week that a mother and her two sons are relocating to Florida... and taking the family business with them.
After lifetimes in the Buffalo area, [Nancy] Bell and her two sons will move to northern Florida by December.
The hit is far worse than just three more people joining the steady stream of upstaters who have fled New York over the years: The Bells are taking their company with them to a part of the country not only with lower taxes, but also with wide-open arms from officials who enthusiastically courted them.
In the ashes: the 21 people the Bells now employ at Science First, which makes a broad range of science-related products, from model skeletons to rain gauges and soil and water testing kits, and distributes them to schools and companies around the country from its facility on Botsford Place in North Buffalo.
“I personally feel we are being driven out of the state, that they are effectively saying they don’t want us here anymore. It makes me mad,” said Nathaniel Bell, whose grandfather, a chemical engineer, started the family business in his Town of Tonawanda basement 49 years ago.
The exodus out of New York State is not just about the super wealthy. It is driving out out small business owners whose business income is treated as personal income on their taxes.
Three-quarters of small-business owners pay taxes through filings as S-corporations or limited liability partnerships. That means company profits are taxed as part of their personal income. But the Bells say the money reported as income doesn’t go to their bank accounts. A large part goes to federal and state taxes, and then about 40 percent is driven back into the company to hire more people and buy equipment and expand.
So of the five family members involved in the business, the state tax rate for two will rise to 8.97 percent from 6.85 percent because their S-corporation filing lists their incomes at more than $500,000, and three others will pay more because their incomes exceed $200,000.
“So there will be less to invest in the business,” Aaron Bell said.
There was no help from local economic development officials in New York. There was, however, lots of help from the Sunshine State. Is this really that much of a shock? Earlier this year, a study came out that put New York State dead last of all fifty states for personal and economic freedom. Florida ranked twenty-two.
As people of all income levels are driven out of New York, businesses follow. Just as Rush Limbaugh advised Tom Golisano, if he really wants to avoid New York's excessive taxes then he can't do business in New York.
If the Siena poll is any indicator, there's a mass exodus out of the Empire State in the making.