Tax Guru-Ker$tetter Letter
Wednesday, May 02, 2007
State Tax Shifting
Shifting income from high tax states to those with low or zero tax rates has long been part of any aggressive tax saving strategy. I've been helping clients exploit these differences for decades.
I am amazed at how many people still live in a fairy tale world and deny that taxes at all levels (local, State, Federal) are very powerful motivators for behavior and thus think they can arbitrarily raise taxes with no consequences in the form of taxpayers leaving their jurisdiction.
There is a good explanation of how this works in real life in today's National Review Online. Purely by coincidence, the town discussed is half located here in Arkansas.