Biden tax hike would accelerate exodus from high-tax states, experts predict

By Brittany De Lea FOXBusiness

Biden’s plan could result in marginal tax rates of more than 60% in three states and New York City.

Democratic nominee Joe Biden’s tax plans have come under scrutiny for designs to raise rates for wealthy Americans – but some experts say they could also contribute to an exodus from high-tax states.

There are a combination of measures within Biden’s tax plan that will affect the finances of the wealthy through a stated concentration on people earning more than $400,000.

First, the former vice president would increase the top income tax bracket to 39.6%, from 37%.

He has also called for capping itemized deductions at 28% for the wealthy, and exposing incomes above $400,000 to the 12.4% Social Security tax (currently, there is a wage cap of $137,700).

There are also changes that have been proposed involving the estate tax basic exclusion amount, step-up in basis and capital gains taxes.

Beau Henderson, financial advisor and founder of RichLife Advisors, said he has clients who are actively considering relocations to lower-tax areas as a means to stretch their retirement dollars – a trend he said could “accelerate” if these changes were to go into effect.