HNWIs being hit the hardest by taxation and turning to Golden Visas in these states

Research by Astons, the international experts on residency and citizenship through investment, has revealed where America’s high-net-worth individuals (HNWIs) are currently feeling the strain of high taxation to the greatest extent and which states are seeing citizens shoulder the highest burden as a proportion of their income.

Astons analysed data on both the percentage of income tax paid by top marginal earners in each state, as well as the total tax burden per capita and what this equates to as a percentage of the average income per capita.

President Biden’s recent budget proposal for the 2024 fiscal year has proposed a $4.7tren tax increase on businesses and individuals that will push the nation’s tax rates to some of the highest in the developed world.

The research shows that when it comes to the states where America’s high-net-worths are already being taxed to the greatest extent, it’s the Golden State of California that tops the table. Currently, the top marginal individual rate of income tax sits at 13.3%, far higher than the 5.47% average seen across all states.

Hawaii is home to the second highest rate of income tax for American HNWIs at 11%, with New York (10.9%), New Jersey (10.75%) and D.C. (10.75%) also ranking amongst the top five.

In contrast, seven states, including Alaska, Florida, Nevada, South Dakota, Tennessee, Texas and Wyoming are home to a 0% rate of top marginal individual income tax.

However, when it comes to the highest tax paid per capita of all earners, New York is home to the highest cost. The average citizen is shouldering a tax burden to the tune of $12,083 USD per year, which equates to 15.9% of the average income of $75,994 USD.

Connecticut ranks second where an annual tax burden of $12,151 USD equates to 15.4% of the average annual income, while Hawaii (14.1%), Vermont (13.6%) and California (13.5%) also rank within the top five states with the highest tax burden to citizens.

Immigration Expert for Astons USA, Alena Lesina, commented:

“Taxation is understandably a hot topic and one that has grown all the hotter with President Biden’s recent proposal for the 2024 fiscal year. While not all states are home to the same high rate of taxation, it’s one of the key factors behind the decision of many to emigrate via residency or citizenship via investment.

Of course, there are states that offer a far lower rate of taxation, but for many a move to Alaska, for example, simply doesn’t suit their lifestyle needs and it’s this combination of both family and professional requirements that are seeing many head to other nations via a Golden Passport or Golden Visa.

The Caribbean is a very popular choice for many Americans when it comes to looking further afield to avoid high levels of taxation. So much so that many are opting to give up their American passport in the process.

Not only does the Caribbean offer world income tax rates of 0%, the mobility index of a Caribbean passport is almost as strong as the USA, with the likes of St Kitts and Nevis offering visa-free travel to Europe and the UK.”