A worker earning $650,000 in Manhattan would have saved nearly $200,000 a year by moving to Miami, due to lower taxes and lower living costs, according to a new study.
According to a study by smart asset released Thursday.
The study compared the cost savings for high earners moving from Chicago, San Francisco or Manhattan to Miami, and found that the savings were “most drastic” for New Yorkers.
This is partly due to Manhattan’s exorbitant cost of living, which is 138% higher than the US average, compared to 23% higher than the average in Miami.
Miami also offers much more favorable tax rates, a difference mainly due to Florida’s lack of state income tax.
A worker earning $650,000 in Manhattan could save nearly $200,000 a year by moving to Miami, due to lower taxes and lower living costs, new research suggests
While high earners in Manhattan are taxed at an effective rate between 36% and 45%, in Miami they would be taxed in the range of 27% to 35% for the same income levels.
For a New Yorker earning an annual salary of $150,000, the annual savings from moving to Miami would total $48,695, according to the study.
Housing costs contribute significantly to the cost of living difference between New York and Miami.
According to Realtor.com, the median real estate listing price in Manhattan is $1.6 million, compared to $666,000 in Miami.
SmartAsset also found that high earners in San Francisco could save significantly by moving to Miami, although the difference is not as big as a move from New York.
The difference in cost of living is smaller, with San Francisco costing 83% more than the US average compared to Miami’s premium 23.
Overall, six-figure earners would save about 24% by moving from San Francisco to Miami.
Housing costs contribute significantly to the difference in cost of living between New York and Miami, while Florida’s lack of income tax also benefits workers.
Miami North Beach and the city skyline are seen from an airplane. Florida has experienced a population boom in recent years, in part due to an influx of wealthy newcomers from the northeast
Meanwhile, the difference between Chicago’s move to Miami is negligible.
While taxes are lower in Miami, the difference is nearly offset by Chicago’s lower cost of living, and high earners can only expect to save 1-2% of their income by moving.
Florida has experienced a population boom in recent years, thanks in part to an influx of wealthy newcomers from the northeast.
From April 2020 to July 2022, the Sunshine State added 707,000 residents, representing a gain of 3.3%, an increase that was second only to Texas.
During the same period, New York and California, which are also among the most populous states, saw the largest net declines in residents, each losing more than 500,000.
These changes reflect internal migration of substantial proportions, fueling soaring population growth in the South that could have economic and political implications for decades to come.
Experts cite a confluence of factors including the rise of remote working, pandemic health fears over dense urban areas and concerns over housing costs, high taxes and crime for driving a flood of internal migration to the Sun Belt states.