Icahn heading to Florida to escape NY state income tax - should MI consider it?

[detlump]

Saw in Bloomberg this morning that Icahn is moving and his company also [[employees who don't move lose their jobs apparently) to Florida to escape personal income tax. Florida's corp. tax is 1% less than NY also.

Should MI consider this as a way to boost population? No nearby states are state income tax free [[TN is the closest). Maybe even a different scale would work such as first $100K no income tax, and then a scale up from there to max at, say 2.5% for incomes over $1M.

[ndavies]

The Snyder administration greatly cut taxes for businesses to hopefully bring in new jobs. Unfortunately you still need to pay for government. If we now cut income taxes, what are we left with?

How are you going to make up for the money you're no longer collecting. We already don't collect enough money to pay for good roads or schools.

As a fiscal conservative I believe in low taxes and the money being well spent, Unfortunately we are so far past that point, Even I see the need to raise taxes.

Being just a low tax state is not going to bring people in. Mississippi is a lower tax state than Florida, Nobody wants to move there. It doesn't have a good infrastructure.

Michigan won't improve without good roads and good schools.

[Wesley Mouch]

The Snyder administration greatly cut taxes for businesses to hopefully bring in new jobs. Unfortunately you still need to pay for government. If we now cut income taxes, what are we left with?

The cost of government isn't like the cost of Special K at the corner market. You can buy vegetables and organic beef, or you might choose to buy Cheetos and Faygo. Its not obvious [[nor true) that $1 spending = $1 services.

How are you going to make up for the money you're no longer collecting. We already don't collect enough money to pay for good roads or schools.

Chronic underspending in roads in MI is hard to dispute. Few dispute this. But its not obvious to me that we don't spend enough on schools? And its not clear that a dollar spent goes to better learning. Looks to me like it goes to the bureaucratic class more than to students.

As a fiscal conservative I believe in low taxes and the money being well spent, Unfortunately we are so far past that point, Even I see the need to raise taxes.

So what's the right level. If you ask teachers, the answer is more. Is there one school district in America that thinks they are well funded?

Being just a low tax state is not going to bring people in. Mississippi is a lower tax state than Florida, Nobody wants to move there. It doesn't have a good infrastructure.

Its not a binary choice between Mississippi and California. It may be the MS gets better results per dollar in mass transit than CA does? There are thousands of things to consider.

No, of course low taxes must be combined with decent services. The current alternative of high taxes and poor services isn't good either. So its a debate. How do we get results without just pouring money like chocolate syrup on ice cream.

Michigan won't improve without good roads and good schools.

Certainly. So how do we get there without being wasteful. That's the hard question. The right would argue that a repeat of 'prevailing wage' laws in roads is good policy. A few workers lose income. A greater number of workers get jobs. A trade-off. Are we better off with union wages for most government work vs. a lower wage and more workers getting a share of the pie?

Like a lot of things, it's complex. We have to be careful, though, IMO, before tossing money onto a pile of poo. There are other options.

[iheartthed]

Short answer: no. Long answer: no.

Icahn employs about 50 people. That wouldn't even fill up one of Detroit's new apartment buildings.

[Richard]

Over half of those 50 are hedge fund managers that make an average of 1.4 million per year.

Outside of the current administrations tax structure that is encouraging high wealth earners to relocate from high tax states,he is 83 years old and this seems to be his preferred way of retiring while still working,his house is on an island with 23 others,most of us would not be allowed over the bridge.

So does the lowered corporate tax pay off in this case of adding 30 more millionaires income to the local economy?

Not to overlook that money follows money and even more so when it comes to hedge funds which is another form of diversity in the local and state economy.

Hedge funds invest,that is how they make money.

It always revolves around short term and long term gains.

The move equals out to a $25,000 difference in taxed payroll,$25,000 x 30 employees that will be spending and investing more in the local economy.

That is $750,000 more expendable income going into the local economy off of just 30 employees.

[1953]

I'd like to strongly agree with ndavies on the above comments: I am all for limited government and fiscal conservatism, but we've cut our tax rates so low that we can't provide basic services at the level that is necessary to maintain an attractive state. Honestly, at this point, I'd rather have a little too much waste than a little too much austerity.

[Richard]

Meh Mississippi is Mississippi,what they do works for them.

The problem is Detroit as a city is stuck with legacy costs and infrastructure disinvestment of many years of population loss.

It has created a ratio of citizens that contribute less then,so those with means are taxed more in order to make up the difference not only for current needs but also covering past obligations.

Thats the catch 22

So what is really needed is an influx of residents that can change the balance.

What if you took the city as a whole and made it into a giant reduced corporate tax scheme.

If you make it limited term of say ten years,while you would lose short term on corporate taxes long term the employees hired or relocated would change the balance.

You could do it on a case by case basis in order to make sure it is viable.

That is the choice,continue to raise taxes for the few left in order to cover everybody,which as we see has a tendency to drive people and investment away or figure away to jump start or add a shot of adrenaline in order to speed up the process.

[Johnnny5]

The phrase "There's no such thing a free lunch" applies here. Just about all the states without an income tax have increased taxes in other areas. Whether that's in higher property taxes, sales taxes, etc. So, moving to these states to lower one's tax burden typically only benefits those with exceptionally high incomes.

Honestly, what I would rather see are state income taxes totally abolished and the Federal government apply an across the board flat rate of 5-7% that reverts back to the individual states where the taxpayer resides.

This would drastically simplify income taxes, and it would end this game that some states are playing trying to the havens for the tax dodging rich.

The thing I find totally ridiculous with Icahn's move is the man is 84 freaking years old and worth over 20 billion dollars. What possible need is there to lower your tax burden by a couple percentage points at that point in your life? He can't spend it and can't take it with him, but doesn't want to pay the extra few points that he owes? The level of greed that implies is sickening, and just boggles my mind.

[iheartthed]

Over half of those 50 are hedge fund managers that make an average of 1.4 million per year.

Outside of the current administrations tax structure that is encouraging high wealth earners to relocate from high tax states,he is 83 years old and this seems to be his preferred way of retiring while still working,his house is on an island with 23 others,most of us would not be allowed over the bridge.

So does the lowered corporate tax pay off in this case of adding 30 more millionaires income to the local economy?

Not to overlook that money follows money and even more so when it comes to hedge funds which is another form of diversity in the local and state economy.

Hedge funds invest,that is how they make money.

It always revolves around short term and long term gains.

The move equals out to a $25,000 difference in taxed payroll,$25,000 x 30 employees that will be spending and investing more in the local economy.

That is $750,000 more expendable income going into the local economy off of just 30 employees.

But if the tax rate is 0, how would Michigan reap the benefit? Those 50 people would not likely ever offset what they would cost the state.

In reality, those jobs wouldn't come to Michigan even if the state paid them to move there, which it effectively would be doing with no income tax. Icahn wanted to be in Florida for personal reasons, but it made a neatly packaged headline for libertarians to rage about New York's taxes.

[bust]

Short answer: no. Long answer: no.

Short answer: Hell no.
Long answer: Hell no, learn from Kansas.

For your reading pleasure:

The Great Kansas Tax Cut Experiment Crashes And Burns
https://www.forbes.com/sites/beltway.../#a3deab15508f

Failed tax-cut experiment in Kansas should guide national leaders
https://thehill.com/opinion/finance/...cut-experiment

As Trump Proposes Tax Cuts, Kansas Deals With Aftermath Of Experiment
https://www.npr.org/2017/10/25/56004...-of-experiment

[Ray1936]

The phrase "There's no such thing a free lunch" applies here. Just about all the states without an income tax have increased taxes in other areas. Whether that's in higher property taxes, sales taxes, etc. So, moving to these states to lower one's tax burden typically only benefits those with exceptionally high income.

Well, speaking for my adopted state of Nevada, I don't see higher taxes in any form here. Property taxes on my home which would go for about 300k are only $2,400 a year and change. Sales tax? 8%; I'm not sure what Michigan's rate is. License plates are a bit higher, but then we have excellent roads. Just sayin'.

[bust]

...the man is 84 freaking years old...

The weather may have as much to do with it as taxes. As everyone already knows, a lot of people his age think that way. Florida [[etc.) is full of retired folks from up North. And of course it's rare for Southerners to want to spend their last years in Michigan or anywhere else up North.

The level of greed that implies is sickening.

Then again, Icahn's greed has always been sickening. He's one of the most notorious old school corporate raiders, in the category of Michael Milken, without the convictions. They worked in partnership after all. Look into how he made his money. He made his fortune destroying American companies with no regard whatsoever for the effect he had on our economy, our country, nor obviously the countless employees who worked for them.

You want him in Michigan? Keep him out.

[iheartthed]

Well, speaking for my adopted state of Nevada, I don't see higher taxes in any form here. Property taxes on my home which would go for about 300k are only $2,400 a year and change. Sales tax? 8%; I'm not sure what Michigan's rate is. License plates are a bit higher, but then we have excellent roads. Just sayin'.

Florida and Nevada also have the luxury of using tourism to subsidize their infrastructure costs.

[bust]

Well, speaking for my adopted state of Nevada, I don't see higher taxes in any form here. Property taxes on my home which would go for about 300k are only $2,400 a year and change. Sales tax? 8%; I'm not sure what Michigan's rate is. License plates are a bit higher, but then we have excellent roads. Just sayin'.

I'm getting off topic, but...

Enjoy it while you can. I'm not alone in hoping some day states will be held accountable to pay its fair share for our national resources. In the case of Nevada, I'm thinking of water. Nevada is one of the states parching the Colorado river dry. Development there squanders essential to our country as a whole, yet water rates and taxes there don't reflect that. They should!

The Colorado River Runs Dry
Dams, irrigation and now climate change have drastically reduced the once-mighty river. Is it a sign of things to come?
https://www.smithsonianmag.com/scien...-dry-61427169/

Water Prices for 30 Major US Cities 2010-2015
https://www.circleofblue.org/wp-cont...2015graphs.pdf

[Richard]

The phrase "There's no such thing a free lunch" applies here. Just about all the states without an income tax have increased taxes in other areas. Whether that's in higher property taxes, sales taxes, etc. So, moving to these states to lower one's tax burden typically only benefits those with exceptionally high incomes.

Honestly, what I would rather see are state income taxes totally abolished and the Federal government apply an across the board flat rate of 5-7% that reverts back to the individual states where the taxpayer resides.

This would drastically simplify income taxes, and it would end this game that some states are playing trying to the havens for the tax dodging rich.

The thing I find totally ridiculous with Icahn's move is the man is 84 freaking years old and worth over 20 billion dollars. What possible need is there to lower your tax burden by a couple percentage points at that point in your life? He can't spend it and can't take it with him, but doesn't want to pay the extra few points that he owes? The level of greed that implies is sickening, and just boggles my mind.

His net worth is centered on the value of his company,it is not like he has $34 billion in cash stuffed in a sock.

The markets drop so does his value.

His age has little to do with it,outside of what he said that he wanted to retire in a warmer climate but he was not ready to retire.But even when he passes his company will live on and it is still his responsibility to look out for its interests long term.

He offered his employees a salary equivalent to a years wages plus $50,000 to relocate with him,or the option of not objecting to the unemployment claims if they choose not to or $450 a month.

In his day Rockafeller was worth $384 BILLION to which his son donated $300 billion to causes.

You can always start a company and donate all of the profits to show you are not greedy.

That is kinda the whole purpose of going into business is striving to be rich,no different then the hundreds of millions playing the lottery every week,are they also looking for greed?

Detroit experienced the down side of a lack of investment,which is more preferable the down side or upside?

[Richard]

Then again, Icahn's greed has always been sickening. He's one of the most notorious old school corporate raiders, in the category of Michael Milken, without the convictions. They worked in partnership after all. Look into how he made his money. He made his fortune destroying American companies with no regard whatsoever for the effect he had on our economy, our country, nor obviously the countless employees who worked for them.

You want him in Michigan? Keep him out.

How is what he did any different then millions of Americans reaching for Chinese products and not supporting American companies thus forcing them to relocate overseas,and the whole nafta thing.

We are no different then he is,what is the first thing everybody does,price check in order to find the cheapest product without a care of who it supports.

[Johnnny5]

His net worth is centered on the value of his company,it is not like he has $34 billion in cash stuffed in a sock.

The markets drop so does his value.

His age has little to do with it,outside of what he said that he wanted to retire in a warmer climate but he was not ready to retire.But even when he passes his company will live on and it is still his responsibility to look out for its interests long term.

His age is a critical part of this discussion, if nothing more than it shows his desire for more wealth [[That he will never spend) extends even beyond the grave. I didn't really consider this before, but it's part of tax strategies that are increasingly being used by the super rich in this country. It's now to the point where death is the only time many of these people will ever pay a significant tax on their wealth/income. By relocating from New York to Florida Icahn is not only avoiding NY state taxes, but more importantly he will dodge the NY inheritance taxes upon his death. In Icahn's case that's literally billions of dollars that will never be paid.

[Ray1936]

I'm getting off topic, but...

Enjoy it while you can. I'm not alone in hoping some day states will be held accountable to pay its fair share for our national resources. In the case of Nevada, I'm thinking of water. Nevada is one of the states parching the Colorado river dry. Development there squanders essential to our country as a whole, yet water rates and taxes there don't reflect that.

Yes, the Colorado River is used to extreme. But as far as Las Vegas is concerned, we return nearly an equal amount of water thanks to other sources [[groundwater, etc.). The following explains:

The city is one of the largest in the Colorado River basin, but its share of the river is relatively small; when officials allocated the Colorado’s water to different states in 1922, no one expected so many people to be living in the Nevada desert. So Nevadans have gotten used to coping with limitations. They can’t water their yards or wash their cars whenever they like; communities follow strict watering schedules. The water authority pays homeowners to replace water-gulping lawns with rocks and drought-tolerant plants. Golf courses adhere to water restrictions. Almost all wastewater is reused or returned to the Colorado River.

[Richard]

His age is a critical part of this discussion, if nothing more than it shows his desire for more wealth [[That he will never spend) extends even beyond the grave. I didn't really consider this before, but it's part of tax strategies that are increasingly being used by the super rich in this country. It's now to the point where death is the only time many of these people will ever pay a significant tax on their wealth/income. By relocating from New York to Florida Icahn is not only avoiding NY state taxes, but more importantly he will dodge the NY inheritance taxes upon his death. In Icahn's case that's literally billions of dollars that will never be paid.

How is what hat he is doing any different then what you and I would do or the many thousands,or in Florida’s case millions are doing?

Just in a different scale.

Honestly if you had the choice of paying $1000 in tax or a $100 which would you prefer or would you just pay the $1000 because it is the right thing to do?

The thing with taxes is they have been around in different forms for over a thousand years and it is easy to see the cause and effect.

New York implements a death tax on the wealthy.

In the 1900s So did Ireland and the UK,Between 1921 and 1923 Ireland lost over 80% of its estates due to fire after implementing the death tax on the wealthy,now both the UK and Ireland spend 100s of millions per year trying to preserve what they have left.

It is easy for the wealthy,they have the means to relocate and reinvest elsewhere.Whereas the ones who do not are left behind.

One can hate them or call them greedy but at the end of the day without thier investment in jobs,philanthropist causes,donations to local causes etc. we are kinda stuck without them.

You might as well tell the big 2.5 in Detroit to pack thier bags because you do not need them,when actually it was their “greed” that helped build the city in the first place.

When a city spreads the message that we do not like big greedy corporations then it is thier loss,corporations can make money anywhere or locate anywhere in the world and still show a profit.

Detroit learned no lessons on what happens to a city when disinvestment occurs?

New York apparently did not either,that is why they are flooding Florida with thier attitude as they run away from policies that they created in the first place.

They are actually chasing the exact same thing that they chased away in the first place.

[Jimaz]

... Enjoy it while you can. I'm not alone in hoping someday states will be held accountable to pay its fair share for our national resources. In the case of Nevada, I'm thinking of water. Nevada is one of the states parching the Colorado river dry. Development there squanders essential to our country as a whole, yet water rates and taxes there don't reflect that. They should!...

You've made a good point.

Google Phoenix AZ satellite view then zoom in to where you can count the number of mostly-unused residential swimming pools. Consider evaporation rates in arid conditions. Then read this: An Enormous Crack Just Opened Up In The Middle Of The Arizona Desert.

They had to repair a freeway near Phoenix due to one of those cracks. Talk about your pothole repairs!

Compensating Colorado River draw with groundwater drawdown is not sustainable.

[Dan Wesson]

Carl Icahn is said to be,
so say people familiar with the matter.

Talking heads conjecturing on motives which sound so political and agreeing with their biased narrative.

Click, Click, click

[archfan]

...
In the 1900s So did Ireland and the UK,Between 1921 and 1923 Ireland lost over 80% of its estates due to fire after implementing the death tax on the wealthy,now both the UK and Ireland spend 100s of millions per year trying to preserve what they have left.
...

JFC, the Big Houses were burned during the Irish Partition and Irish Civil War, when Irish nationalists attacked the Anglo-Irish aristocracy. It had nothing to do with taxes.

[Pat001]

People are fleeing high tax states but even if you cut Michigan's taxes to zero, Michigan won't ever have Florida's climate.

[Richard]

^ different states have thier pluses and minuses,Michigan has a lot to offer to the outdoors type.

During the boom a lot of Fl Middle class sold out and moved up to the Carolinas,Tennessee and North Atlanta.

From the middle of the state and up it gets brisk and downright cold,November to February or March are the best months the rest are spent going from an A/C house to an A/C car to an A/C job,last week it was 110 with heat index,so walk from your house to the mailbox and you are covered in sweat.

It is also different because the houses are not built for the cold and your blood thins,I grew up in -50 winters and now when it gets in the 50s here you see people bring out the winter gear.

It is really only about 4 months that are bearable,then there are little tiny mosquitos that eat you alive,at least up there you can hit them with a bat,every creepy crawly critter and bug loves it here also without the cold to kill them off.

It is expensive in most parts,Miami,middle to lower income survive with lower expendable incomes,multiple families will pool together to rent or buy a house,so you have several families living in one house.

The same anti transit,sprawl loving people that live up there and move down here,bring the same attitude with them,inner city schools and roads are no different then up there.

Because it is tourist state most everything you do is about money,you cannot even throw a fishing line in the water without a license,Disney World and most of the attractions have become so expensive that most residents cannot afford to go anymore.

Given the choice of Miami or Detroit,in spite of the cold I would take Detroit,a lot also move here then move away after a year or so,you do not really associate with people until they have lived here at least 5 years,I have been here 40 years and outside of my kids know nobody else outside of a friend from and in the UK in all of that time,it is extremely transient.

Outside of the rural towns people can live in a house for ten years and never even know thier neighbors and most stay broke because they have to look good to others,have to have a new car every year,designer clothes,lots of gold chains etc then complain because they stay broke.

Outside of the beaches the cities and towns are no different then any city in the rest of the country,granted no snow but the grass is not always greener and every state has its good and bad.

Besides have the millions moving here not heard it will be under water in another 10 years anyways?

[iheartthed]

Tax havens are generally not good economic hubs. Rich people may move those places to sit on their money, but ambitious people don't move to those places to create things. The most booming economies are mostly in mid to high-tax blue states. San Francisco is high-tax, nosebleed expensive, and has posted some of the biggest population gains of the current decade.