Almost half of income taxes paid to California, New York and New Jersey are from the wealthiest 1% of earners. If they were to move in large enough numbers, those states could be in trouble. New York, New Jersey, Connecticut and Maryland sued the Trump administration last year to invalidate the $10,000 cap, saying that it unfairly targets them. States have sought to pass loopholes around the limit and there’s a push in Congress to reverse it.
But migration rates in high tax states most affected by SALT are below pre-recession levels, and generally in-line with U.S trends, Moody’s Investors Service said in April. Jobs, housing and the weather influence migration more than taxes, according to Moody’s analyst Marcia Van Wagner.
“Armageddon hasn’t resulted from the changes to SALT, but it still may be too early to measure its impact," said Matt Dalton, chief executive officer of Rye Brook, New York-based Belle Haven Investments, which manages $9 billion of municipal bonds. “You see more mansions listed in New York. Manhattan real estate sales just had their worst quarter in a decade."
This article provided by Bloomberg News.