Yesterday’s news that New Jersey may be headed for fiscal peril now that the state’s wealthiest resident, hedge fund billionaire David Tepper is headed for warmer (and more tax receptive climes), caught many by surprise. Not his departure that is, but just how much of New Jersey’s tax revenue was contingent on just this one person. As Bloomberg reported, “New Jersey relies on personal income taxes for about 40% of its revenue, and less than 1% of taxpayers contribute about a third of those collections. A one percent forecasting error in the income-tax estimate can mean a $140 million gap.”
This means that a potential billionaire exodus from states such as CT and NJ (or any other), is emerging as one of the bigger fiscal threats to state budgets.
So which states are most at risk? For the answer we used the latest Forbes data listing the states with the most billionaires. According to the magazine, there are “540 billionaires in the United States, with a combined net worth of $2.399 trillion. That’s more billionaires and more combined net worth than any other nation in the world.”
This is where they live across the U.S.:
For the sake of California’s fiscal stability, we hope governor Jerry Brown has better ideas of how to retain the 124 billionaires (with a cumulative net worth of over half a trillion dollars) currently calling the Golden State home than by merely continuing with his minimum wage hike bonanza. As we reported yesterday, California has already seen an exodus of state residents departing for other places in the US like Texas. If the all important billionaires were to depart, it would get very ugly for the state whose budget is already on edge.
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Contributed by Tyler Durden of Zero Hedge.
On a long enough timeline the survival rate for everyone drops to zero.